Point of View

Tax hikes can’t be part of a bargain

November 30, 2012 

I don’t know about you but I have always been leery of politicians who have “grown” during their time in Washington. Since the elections it seems that some Republicans have “grown” when it comes to tax rates and dealing with the so-called fiscal cliff.

As an old supply-sider and follower of the late Jack Kemp – the GOP’S “Happy Warrior” – I have always subscribed to – and have seen the proof of – the view that lower tax rates help create jobs. And as President John Kennedy said, “A rising tide lifts all boats.” Both Kennedy and President Ronald Reagan understood that lower taxes benefit all sectors and segments of the economy.

In contrast, President Barack Obama’s insistence on raising tax rates on those who make over $250,000 will stifle job creation and may well increase unemployment.

It should be pointed out that 64 percent of all new jobs are created by small business owners, and they will take it on the chin if Obama and his allies in the Senate have their way and bump the top tax rate from 35 percent to 39.6 percent.

Couple an increased tax rate with the costs imposed by Obamacare on small business and you have a recipe for slow job growth and potentially another recession.

There is much talk of a “Grand Bargain” by the president. From this conservative’s point of view, any such bargain must include no net tax increase, no decoupling of tax rates, no sequester without spending reductions, no two-step process that kicks the can down the road and no increase to the debt limit without budget cuts and spending caps.

The fiscal cliff can be avoided and a path to economic prosperity can be attained only if Republicans stick to their principles. Republicans historically have been the party of low taxes. That stance has served the party well, and because of Reagan and Kemp it resulted in 25 years of record economic growth for America.

Obama’s re-election was not a mandate in any way, shape or form. It certainly wasn’t a mandate to raise taxes.

Now is not a time for Republicans to panic and to retreat. Republicans must pivot and change the debate, and stick to their no new taxes pledge. Don’t play the president’s class warfare game on taxes, and question why bloated and duplicative government programs need more money, especially when the nation has incurred a $16 trillion debt that is growing daily.

Republicans must also insist on transparency on the fiscal cliff negotiations. The process should be open and on C-SPAN.

The country is hungering for fiscal sanity and it understands that we can’t spend our way out of this economic crisis. The public also understands that if we keep on the same track that the president and allies have prescribed, we are then well on our way to the track taken by Greece.

Inaction and uncertainty will not serve the American public or our job creators. Real tax reform, significant spending cuts, lower tax rates for individuals and coming to grips with entitlements will.

Marc Rotterman, a senior fellow at the John Locke Foundation, served in the Reagan administration from 1981-1984 and is a former board member of the American Conservative Union.

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