Avoiding The Fiscal Cliff: If Clinton-Era Tax Rates Are Good, Why Not Clinton-Era Spending Levels, Too?Dec 04, 2012
In the aftermath of the campaign almost all of Washington's attention has focused on the "Fiscal Cliff." House Republicans, still solidly in charge and, for the time being, remembering that it is the House that is constitutionally charged with initiating money bills, remains opposed to tax rate increases. President Obama, on the other hand, seems to think he won a mandate to soak the rich. In fact, he's soaking everyone. Little known to the average Joe and Jane is that Obamacare has several crippling tax increases that don't take effect until 2013 or 2014, including several on the darling middle class that he speaks so majestically about saving. (Or "rebuilding," as if the government can manufacture an entire economic class of people, as if people are roads to be built — maybe, because with this president, it always seems to come down to the need to "build roads, bridges and infrastructure" even when "they weren't as shovel ready as we thought.")
One of these tax increases, which is completely non-sequitor to health care, is a 3.8 percent surtax on any gains after selling a house. Talk about "rebuilding." How does he expect to kickstart the housing industry when people, wanting to sell their house to, perhaps, accomodate a growing family, or realize a profit after a lot of sweat equity, gets hammered with a new tax, the money of which would otherwise go toward buying their new house?
So President Obama's rhetoric about raising taxes on the rich while maintaining the current tax rates on the middle class as part of any deal to avoid the fiscal cliff is disingenuous. But that's not the worst of of it. His ad nauseum, rote, teleprompter induced refrain that the spectrum of tax rates he proposes are the same as they were during the economically good years during the Clinton administration are absent of one key fact: Spending was about half of what it is now. Funny how that's never mentioned.
If the president wants to go back to the income tax rates of "the Clinton years" then we should go back to the spending levels of those same years. Is it just me, or is it odd that this rather important part of the equation is omitted from President Obama's talking points; that the mainstream media, and even conservatives, seem to neglect it. So while we're going to go back to "Clinton era" income tax rates (by letting the "Bush tax rates" — which the president himself renewed two years ago — expire if no deal is reached by January 1) let's go back to that period's same spending levels. That would result in real spending reductions of about $1.5 trillion a year, which would come close to, if not actually, balance the yearly budget (if the Senate would ever pass a budget). Then, maybe, we can have an honest discussion about avoiding the so-called fiscal cliff.