Why the GOP shouldn’t cave on taxes
Let me start off by saying I have no doubt that Sen. Tom Coburn wants smaller government — much smaller government. But is giving more money to government — and hoping against precedent that Washington just doesn’t spend the new cash — the best way of doing it? Here is a bit from his Meet the Press interview yesterday:
GREGORY: Let me stick with you on the point of contention, particularly with senators like you, Republicans, conservatives, and outside groups having to do with taxes. Could you support a deal here out of this Gang of Six on the budget that includes tax increases?
COBURN: Well, we’re not talking about it. I think if you go back and look at the commission’s report, what we were talking about is getting significant dynamic effects by taking away tax credits, lowering the tax rate and having an economic increase that will actually increase the revenues to the federal government. We’re not talking about raising tax rates at all. … So if there is a net effect of tax revenue, that would be fine with me. I experienced that during Reagan’s period in 1986.
Except that we’re not just talking about more revenue from economic growth. Coburn’s Gang of Six would reduce various tax breaks and loopholes so that taxpayers would be supplying more revenue to Washington. Apparently Coburn believes this is a price that must be paid to get a debt reduction agreement with Democrats.
But what exactly would spending hawks get in return? Are Democrats offering to dump Obamacare or agree to a revamp of Medicare like the one proposed by Paul Ryan. Highly unlikely. If that were the case, Coburn would have a much stronger arguement. If not, a better compromise might be lower defense spending in exchange for other cuts discretionary or mandatory spending.
And remember the context: The reason America is on an unsustainable fiscal track is that spending, not revenue, is moving away from the historical average.