Unless the law is changed, big tax increases will be imposed on all taxpayers next year. This is the so-called fiscal cliff, and President Obama is using this unpalatable situation as an excuse to push for his class-warfare tax policy.
I talk about the political and economic ramification of this fight with Glenn Reynolds, author of the famous Instapundit blog.
As is my habit, there are a couple of points that deserve some elaboration.
- Budget deals don’t work – I wrote about this issue back in 2010, but I think the most persuasive piece of evidence came from the New York Times, which inadvertently admitted that the only successful budget deal was the 1997 pact that cut taxes rather than raising them.
- We should only raise taxes on those who say they want higher taxes – Since the Hollywood left (with some noble exceptions such as Jon Lovitz and Rob Schneider) is in favor of bigger government and higher tax rates, Glenn has suggested a restoration of the federal tax on movie receipts. That hasn’t worked very well in Spain, but I like the idea. In the same spirit, I’ve proposed a tax on CEO salaries since the big business community is trying to curry favor with the political class by endorsing tax hikes.
- Republicans won this fight in 2010 when they had less power – The same fiscal cliff fight took place two years ago, before the Republicans controlled the House and when they had fewer seats in the House. Yet GOPers prevailed because Senate Republicans stuck together. It would be a sign on remarkable incompetence if they lost this year’s fight since they now have much more power.
- Long-term incumbents get too comfortable with big government – I joked about politicians who come to Washington thinking it’s a cesspool, but eventually think it’s a hot tub, but that’s actually a very serious point. As I explain in this post, too many GOPers get corrupted by big government.
- It’s simple to balance the budget with modest spending restraint – According to Congressional Budget Office data, we can make the Bush tax cuts permanent and balance the budget in just 10 years if lawmakers simply exercise some modest fiscal restraint and limit spending so it grows by an average of 2.5 percent yearly.
- Most important, I sneak in an endorsement of my beloved Bulldawgs at the end of the interview – I’ve been very restrained and have not used this blog as a platform to celebrate Georgia being two wins away from the national title. Actually, the SEC Championship Game this weekend is the de facto national title game, though whichever team that prevails will have to take the pro forma step of mopping the floor with Notre Dame in January. This cartoon shows the state of play.
P.S. I appreciated Glenn’s reference to Lucy, Charlie Brown, and the football. To see my re-creation of that Peanuts classic, look at the cartoon in this post.
[…] let’s focus specifically on the budget and tax negotiations. As I explained the other day, we basically have a situation where the President wants to trick GOPers into jumping out of the […]
[…] let’s focus specifically on the budget and tax negotiations. As I explained the other day, we basically have a situation where the President wants to trick GOPers into jumping out of the […]
[…] let’s focus specifically on the budget and tax negotiations. As I explained the other day, we basically have a situation where the President wants to trick GOPers into jumping out of the […]
[…] In the interview, I don’t say what should happen, though I’ve previously argued that it’s better to go over the cliff rather than give Obama a victory that will set the stage for further defeats over the next two years. […]
[…] In the interview, I don’t say what should happen, though I’ve previously argued that it’s better to go over the cliff rather than give Obama a victory that will set the stage for further defeats over the next two years. […]
[…] talk of tax hikes (especially by crony capitalists), I am willing to make a special exception and support an excise tax on CEO salaries. Anybody who endorses higher taxes should be first in line for the […]
[…] talk of tax hikes (especially by crony capitalists), I am willing to make a special exception and support an excise tax on CEO salaries. Anybody who endorses higher taxes should be first in line for the […]
[…] very concerned about both the fiscal cliff and its possible replacements. It will be bad news if we get an automatic tax hike on January 1, and it will be bad news if that tax increase is replaced by an even more odious plan concocted by […]
[…] very concerned about both the fiscal cliff and its possible replacements. It will bebad news if we get an automatic tax hike on January 1, and it will be bad news if that tax increase is replaced by an even more odious plan concocted by […]
[…] let’s focus specifically on the budget and tax negotiations. As I explained the other day, we basically have a situation where the President wants to trick GOPers into jumping out of the […]
[…] very concerned about both the fiscal cliff and its possible replacements. It will be bad news if we get an automatic tax hike on January 1, and it will be bad news if that tax increase is replaced by an even more odious plan concocted by […]
[…] let’s focus specifically on the budget and tax negotiations. As I explained the other day, we basically have a situation where the President wants to trick GOPers into jumping out of the […]
[…] Talking Fiscal Cliff and GOP Fecklessness with the Instapundit […]
If Murray stays upright, ‘Dogs win. Otherwise…..:[
Absolutely love your economic blog! But you don’t know s#%t about football… Georgia BS dawgs are totally overmatched this weekend, and ‘bama, well, they lost to a freshman quarterback, right? Puhleeze Daniel, SEC football is awesome, no doubt, but this is the nature of football (and warfare, btw, just listen to Mr Spock speaking of war secrets… Like our drone program, now used by how many nations???, but I digress) other areas catch up and surpass, nature of the game. I can still remember Joe Theissman throwing a 30+ yard pass out of the end zone against ‘bama in … I think ’73 or ’77, leading to the victory over those those southern knuckle draggers!!! TIC of course…(tongue in cheek) for southerners
That was cute with tie.
George, because the consequences will sink us all.
Not one more cent should go to Washington, D.C.
End all withholdings, make all write monthly checks, end of foolishness.
Dan, why not let the Democrats have to deal with the consequences of the instant broadening of the tax base and the increase of taxes of all? George
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