Heritage Foundation Scholars respond to Obama debt reduction proposal (Part 4)

Ernest Istook at the Saint Paul Tea Party Rally 4/16/2011 Part 1

Ernest Istook, US Congressman, Heritage Foundation, http://www.heritage.org, spoke at the Saint Paul Tea Party Rally 4/16/2011. Hosted by North Star Tea Party Patriots, and Sue Jeffers.

I love going to the Heritage Foundation website for articles like this:

Obama’s Debt Reduction and Tax Proposal

Heritage Responds to Obama’s Debt Reduction and Tax Proposal

Mike Brownfield

September 19, 2011 at 11:16 am

Heritage’s experts watched President Barack Obama’s debt reduction and tax increase proposal. Here are their immediate reactions:

_______________

Who Really Is Paying Obama’s Latest Tax Hikes

Over half of President Obama’s deficit reduction plan announced today would come from tax increases – to the tune of $1.5 trillion – on families and businesses earning over $250,000 a year.

His plan singles out both industries and individuals, such as oil companies and corporate-jet owners. This is a worn out, faulty proposal for a tax system that needs major restructuring rather than a few fine-sounding flourishes. Taxing those who Obama calls the wealthiest of Americans won’t solve our deficit problem – and it certainly won’t solve our spending problem. The top 10 percent of earners in America already pay about 70 percent of federal income taxes. And adopting the flawed deficit reduction proposal of taxing the wealthiest Americans would require mathematically unfeasible tax rates.

How ironic for this speech – specifically its tax hikes component – to come on the heels of Obama’s speech on job creation? Never mind the President’s flawed assumption that the federal government can and should be in the business of creating jobs. But to propose taxing further the very Americans who should be the ones creating jobs in our economy flies in the face of logic. Rep. Paul Ryan (R-WI) summed up the situation well over the weekend:

If you tax job creators more, you get less job creation. If you tax investment more, you get less investment.”

Mr. President, America needs more investment and it needs more job creation. It needs Washington to get out of the way.

Emily Goff

This is not Tax Reform Mr. President

President Obama’s says he wants to debt committee to reform the tax code but raise taxes by $1.5 trillion at the same time. That isn’t tax reform. It is dressing up tax hikes in tax reform’s robes.

Tax Reform entails fixing the tax base so it does not favor certain economic behaviors or deter others. This is done by closing so-called “loopholes.” The revenue raised from eliminating those credits, deductions, and exemptions is then used to lower income tax rates and eliminate taxation on saving and investing to encourage more productive activity. The new and improved tax code should raise the same amount of revenue as the old code.

The new revenue would come from allowing the Bush tax cuts to expire for families and small businesses earning more than $250,000 a year, limiting deductions their deductions, and the President’s new “Buffett Rule” that would further raise these job creator’s taxes in some way which the President has not defined. He also wants to eliminate deductions, credits, and exemptions. This is a war the President is waging on success – as if so-called fat cats were the root of our spending problems.

The $1.5 trillion in higher taxes would grow the already bloated federal government by that amount. Congress never uses tax hikes for deficit reduction. It always uses the extra revenue to pay for new programs.

The brunt of these tax hikes would fall on job creators – businesses that employ workers and investors – that the economy desperately needs to start adding new jobs. Raising their taxes will only cause them to cut further back on their hiring plans or scrap them altogether. And without seriously tackling spending, taxes will have to rise perpetually.

The economy and the American people cannot afford the President’s government-growing, job-killing conception of tax reform.

Curtis Dubay


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