August 2, 2010

August 2, 2010 | Commentary on Taxes

Tax Hike Planned For Lame-Duck Session

Lame-Duck Tax Hike Planned

Liberals in Congress have a plan to raise your taxes after the elections this fall, something they must do to continue feeding the Obama Administration’s spending addiction.  Watch for them to act after the midterm elections under the cover of the report from the bipartisan National Commission on Fiscal Responsibility and Reform.

You don’t need a commission to see that President Obama’s policies have led to out-of-control federal spending and a growing federal government.  According to the Congressional Budget Office, publicly held federal debt will hit 62% by the end of this fiscal year.  Compare this to 2007, when publicly held federal debt was at 36%.  If the President and the commission don’t recommend comprehensive reform of entitlement programs, then the government will have to try to raise taxes radically on all Americans to pay for Obamacare, a potential new stimulus plan, and to service the ballooning federal debt. 

The CBO this month provided some more bad news for Americans and good news for those pushing tax hikes.  It released a report indicating the federal government took in $1.6 trillion and spent $2.6 trillion in just the first nine months of the fiscal year.  That’s a deficit of $1 trillion in a mere nine months.  Do you now understand why President Obama is pushing for a special session of Congress—after the elections—to raise taxes?

Obama was smart in the way he set up his commission.  It reports to Congress on December 1.  Congressmen who were voted out of office in November for excessive government spending will be allowed to stick it to the taxpayers one more time by voting for massive tax increases, and, since they’re already unemployed, they’ll face no electoral consequences.

What Taxes Will Obama Raise?

The President told his commission that “everything has to be on the table.”  Translated, this means the commission needs to marry small, symbolic spending cuts with higher taxes on the average American.  In testimony before the commission, the Committee for a Responsible Federal Budget suggested a carbon tax to raise money.  Others want a value-added tax.  A VAT is essentially a hidden national sales tax that could raise the federal tax bite by 25% or more.  Both of these proposals would hit lower-income people who are looking for jobs.  Taxpayers should worry that lame-duck politicians, lacking all accountability, will make one last effort for team Obama and raise taxes.

Federal Bureaucrats Get Paid Far Too Much

James Sherk of The Heritage Foundation has recently shown that many federal bureaucrats are overpaid.  Contrary to what government apologists maintain, Sherk found that hourly wages for federal employees are 22% above comparable private-sector workers.  The government workers also get more generous benefits, such as expensive healthcare and pension plans.  Add these benefits to hourly wages and federal bureaucrats get total compensation 30%-40% above similarly skilled private-sector workers.  Feds also have near-total job security and aren’t likely to lose their jobs in a recession.  Reducing federal pay to market rates would save the taxpayers $47 billion a year.  Conservatives love the free market and hate a “Payroll for Pals” scheme that forcibly takes your tax dollars out of the private economy to further grow the federal government.

Thune’s Plan to Cut Spending

Sen. John Thune (R.-S.D.) has his own plan to cut federal spending, and it doesn’t include tax increases.  Thune says, “As families across our country make tough financial choices to live within their means, Washington continues to spend borrowed money at an alarming and dangerous rate.  My bill would cut and cap spending, reform the broken budget process, end the trust-fund dishonesty and create a new permanent joint congressional committee tasked with continuously cutting the deficit without raising taxes.”  Thune’s legislation limits federal spending, reforms the budget process and creates a committee to bring about budget deficit reduction.  While it “will not be a cure-all for our nation's economic woes,” at least Sen. Thune has some ideas to advance as an alternative to President Obama’s tax-increase commission.

New START Treaty

This week, the Senate Foreign Relations Committee could vote to approve the new treaty on Strategic Arms Reduction, or START treaty.  Chairman John Kerry (D.-Mass.) is rushing consideration of the treaty, leaving little time for the American people to understand its unfortunate consequences.  The treaty would undermine America’s national security, because it fails to address Russia’s massive tactical nuclear arsenal, limits America’s missile-defense capabilities and ignores Iran and North Korea’s nuclear developments.  Senators must weigh each of these concerns seriously.  They also need to discuss whether the verification measures are sufficient, since the Russians have a history of cheating on treaties.

Not only do senators need to slow down, they need to involve the American people.  Heritage Action for America, a new conservative grassroots group, is trying to just that.  Last month, it launched a national campaign to make the people’s voice heard on repealing Obamacare and stopping the START Treaty.

Washington needs to listen to the American people.  Don’t increase taxes.  Do lower federal pay. And stop dismantling missile defense.  The American people want a strong economy, smaller government and a strong national defense.

Brian Darling is director of U.S. Senate Relations at The Heritage Foundation.

About the Author

Brian Darling Senior Fellow for Government Studies
Government Studies

First appeared in Human Events