Bush: Tax hikes on the table for Social Security

December 20, 2006 at 9:25 am

The Washington Post:

Signaling a new flexibility on issues in the wake of the Democrats’ wins, Bush said he is willing to discuss Democratic ideas for solving the Social Security problem, including tax increases. “I don’t see how you can move forward without people feeling comfortable about putting ideas on the table,” Bush said when asked about the prospect of tax increases to keep Social Security solvent. “I have made it clear that I have a way forward that can do it [without raising taxes] and I want to hear other people’s opinions.”

Here is the problem: Bush will put tax increases in the table for discussion while Democrats will continue to say no to discussing personal retirement accounts. It is not a fair trade. This is a strategy that I fear will end with a poor solution for the Social Security problem and a tax increase. If that happens, all the effort that this President has put forth to avoid the “read my lips” moment that his father could not will have been for nothing.

Soaking the rich

December 20, 2006 at 8:27 am

The Wall Street Journal today:

Maybe our liberal friends are onto something. They keep saying the rich should pay more taxes, and it turns out the rich already are! That’s one of the valuable lessons from the IRS’s annual study of income tax data, just released for 2004.

Americans who earned more than $1 million in adjusted gross income paid $178 billion, or an average of $740,000 per filer, in income taxes in 2004. That’s up about one-third from 2002, the year before the Bush tax cuts in marginal income-tax and dividend and capital gains rates. The wealthiest 1% of tax filers paid a remarkable 35% of all individual income-tax payments that year.

Where will the money come from?

December 11, 2006 at 10:19 am

Witness the Democrats’ Christmas wish-list:

WASHINGTON — After being out of power for 12 years, Democrats will take control of Congress next month with a wish list of new programs, including more money for college student aid, the No Child Left Behind schools initiative and Medicare prescription drug benefits — plus tax relief for middle-income Americans.

But there’s a hitch: The Democrats also have promised to restore fiscal responsibility and not increase the federal deficit.

So how will liberals in Congress make this happen? I think you know the answer.

Bush should talk like this more often

October 25, 2006 at 9:29 am

Yesterday President Bush rolled up his sleeves and told the truth about liberal inclinations to raise taxes and he did it in an amicable way:

President Bush accused Democrats on Tuesday of being “genetically disposed” to raise taxes, as he sharpened his rhetoric on the economy in an effort to rally Republicans to the polls next month.

Appearing here on behalf of GOP congressional hopeful Vern Buchanan, Bush mocked Democrats for what he described as their misplaced pessimism that tax cuts would not stimulate the economy. He said it was only one of many poor predictions by the Democrats and suggested they are making another mistake in their growing confidence that they might take the House next month.

“I think they may be measuring the drapes,” Bush said to titters within the crowd of GOP partisans. “If their electoral predictions are as reliable as their economic predictions, November 7th is going to be a good day for the Republicans.”

Speaking of raising taxes, make sure to take a peek in the extended section to read a list of tax cuts that Dems will do their best to “let expire” (read raise taxes) if they take control of Congress. The list was put together by the Republican Study Committee:

Read the rest of this entry »

On taxes

October 18, 2006 at 7:30 pm

Andy Roth links to a good quote from Larry Kudlow:

“Our true choice is not between tax reduction, on the one hand, and the avoidance of large federal deficits on the other…[A]n economy hampered by restrictive tax rates will never produce enough jobs or enough profits…It is a paradoxical truth that tax rates are too high today and tax revenues are too low, and the soundest way to raise revenues in the long run is to cut rates now.”

While I like the quote, I think it is important that conservatives remember the real reason for cutting taxes: it is the people’s money, not the government’s. Too often we conservatives — myself included — find ourselves arguing for tax cuts because they increase federal revenues. From a conservative perspective, this is not at all what we want. We want the government to be smaller, not have more funds at hand with which to continually expand the already bloated welfare state.

A minor quibble, but I think worth noting…

Good tax policy

September 21, 2006 at 11:25 am

If Congress wanted to enact some good tax policy before they went home to campaign for the fall they could bring up a bill like HR 6057 spnosered by Representatives Mike Pence and Eric Cantor. The Club for Growth, who is key voting cosponsorship of the bill, explains why it is a must-pass:

Right now, American taxpayers are required to pay taxes on capital gains, including the “gains” made through inflation. This bill is a matter of tax fairness. It does away with the tax on inflation, allowing taxpayers to index for inflation the cost basis used in calculating the capital gains tax.

Inflation erodes the real economic gains that can be made by investing capital in the marketplace. Inflation is itself a stealth tax so it’s absurd that Americans should be double taxed on assets that they expose to risk. Removal of this hidden tax will encourage investment that will lead to more innovation, more production, and more wealth.

National Review’s Phil Kerpen:

Fortunately, new legislation sponsored by Reps. Mike Pence (R., Ind.) and Eric Cantor (R., Va.), H.R. 6057, would repeal the inflation tax. The bill would index the tax basis for an asset to inflation, taxing only real gains, not inflation. With the burgeoning investor class making up more than half of voters, this basic fairness issue is sound politics as well as policy. Pence-Cantor is a bill that should become a law.

Much more here.

A mind reading IRS?

July 26, 2006 at 3:58 pm

A bill crafted by Senator Chuck Grassley masquerades as a tax cut but in reality is a tax hike. The Telephone Excise Tax Act, approved by Grassley’s Finance Committee, would actually be an $8.8 billion tax increase according to a report released by the Joint Committee on Taxation.

As if that wasn’t troubling enough, the bill contains a provision referred to as the “economic substance doctrine.” That would empower the Internal Revenue Service to determine the motivations behind individuals’ financial decisions. In an effort to close tax loopholes, the bill would allow IRS officials to review tax-related transactions and draw conclusions as to the reasoning behind those transactions.

So the next time you deduct your home mortgage interest, you may be subject to the whims of a bureaucrat in the IRS. Were your motivations pure? Or where you just trying to avoid paying more in taxes?

Conservatives on the hill are incensed by this intrusive tactic that basically allows bureaucrats to become mind readers. Besides, is it not perfectly legitimate for people and companies to do their best to avoid paying more in taxes than they are legally obligated to?

Lawmakers ought to be simplifying the tax system, not making it even more complex.

Grassley’s bill could receive floor time after the Senate returns from its August recess.

Repealing the Death Tax would be double good

June 6, 2006 at 3:07 pm

If Senate conservatives overcome the odds this Thursday and invoke cloture on the Death Tax Repeal bill not only will the unjust and excessively punitive death tax be on the fast track to repeal, but a vote on the race-based creation of a new Native Hawaiian government will be delayed.

The Senate schedule currently calls for the consideration of the Akaka bill after the consideration of Death Tax repeal. If conservatives break a Democratic filibuster against the Death Tax Repeal the Senate will be forced to debate the Death Tax for an extended period of time — leaving opponents of race-based governing more time to garner the necessary votes to kill the Akaka bill.

As reported below, opponents of Akaka are close…but I think need more time.

Word on the Hill is that some of those opponents will organize a press conference tomorrow to help rally the troops. Will it be too little too late? I hope not.