Taxes & Spending

Raising Taxes Would Doom GOP in 2008

There are many mistakes the Democrats might make in the next two years to lose control of the House and Senate.

There is one big mistake the Republicans can make that would keep the Democrats in charge of the Congress and hand them the White House:

Raise taxes.

The next two years will consist of the Democrat leadership in Congress and their allies in the establishment press trying every possible stratagem to trick George Bush and the Republicans in Congress into raising taxes. Everything else in the next two years will be a distraction.

You can see it coming a mile away. It should be the easiest rookie mistake to avoid. After all, 193 Republicans and four Democrats in the House of Representatives have signed the Taxpayer Protection Pledge promising to oppose all tax hikes. Forty-two Republican senators and one Democrat senator have signed the Taxpayer Protection Pledge. And President George W. Bush was the first Presidential candidate in 2000 to sign the Taxpayer Protection Pledge.

Bush and the Republican congress have cut taxes every single year since 2000. Income tax rates have been reduced. The capital gains tax was cut from 20% to 15%. Tariffs were slashed. The tax on dividend payments was cut from 35% to 15%. The marriage penalty tax was reduced. The child tax credit was doubled from $500 to $1,000. Small businesses are now allowed to expense some of their business investments rather than depreciate them over a long period.

The Republican Congress voted to abolish the death tax over and over. Only the Democrat-led filibuster stopped this relic of the Civil War from being put to sleep.

But Republicans have fallen for this trick before. George H.W. Bush raised taxes in 1990. It cost him his presidency in 1992. Even Ronald Reagan in 1982 was tricked into raising taxes with a promise from Tip O’Neill that the democrats would cut spending by three dollars for every dollar of tax hike. Never happened. The Great Communicator got conned.

The Democrats have a secret—OK, not so secret—weapon in this fight. The establishment press will praise any Republican willing to discuss a tax hike as bi-partisan, statesmanlike. Flowers. Gifts of free television time. Press as good as John McCain gets when he voted against the Bush tax cuts and called for gun control. Assurances that CBS will still respect you in the morning.

There is the wonderful scene in “The Godfather,” where Tessio (played by Abe Vigoda) offered to “arrange a meeting” with Michael Corleone’s (Al Pacino’s) rival Emilio Barzine. (Richard Conte). Michael Corleone had been warned by his father, the godfather, played by Marlon Brando that the person offering to arrange the deal would be the traitor.

Let us now warn the Republicans of the three approaches the Democrats will use to lure them onto the rocks labeled, “tax hike.”

First, will be the “Social Security reform” deal. After denying President Bush his goal of reforming the present Social Security system to create fully funded independently held personal accounts for every American, the Democrats will now offer a deal. The deal will be the same fix that has always papered over Social Security’s problems. Higher taxes on working men and women and lower benefits for retirees. Both of these “fixes” reduce the rate of return young Americans get on their Social Security, FICA, payments. Such a tax hike/benefit cut reform will make the system temporarily solvent. It will not let Americans own their own retirement as President Bush wanted.

President Bush was elected twice on the promise to oppose any tax hike or benefit cut in Social Security. He campaigned to give all young Americans the option of a personal savings account that they control. If he holds fast, he can, like Hercules lashed to the mast, avoid this Siren song that has misled so many in the past.

The second Trojan Horse will be labeled “Tax Reform.” Like the Three Card Monte shysters on the streets of New York the Democrats will call for some tax hikes, some tax cuts and over time when the small print dries the “revenue neutral” tax bill will be a major tax hike. “Tax reform” has always been a code word among Democrats for “tax hike.”

And the third Trojan Horse the Democrats will try will be the repeal of the Alternative Minimum Tax. Because the Democrats have written rules that forbid any net tax cut, they will have to “pay for” the AMT repeal by raising at least one trillion (yes, trillion with a T) dollars in higher taxes elsewhere. Again, the tax hikes will outweigh the AMT “reform.”

The Democrats ran in 2006 promising to end corruption and reduce spending. They will now replace amateur Republican corruption with systematic New Orleans/Chicago/New Jersey-style corruption. Already we have Jefferson, Murtha, Mollohan, Conyers and Menendez . On spending, one had an inkling of what Democrat control would mean when the National Taxpayers Union released a study last year showing that the average Republican congressman in 2005 had co-sponsored legislation that would increase spending by $12 billion (bad) compared to the average Democrat congressman who had co-sponsored legislation to increase federal spending by $547 billion. The Democrats will spend the next two years proving that they are more corrupt and bigger spenders than the Republicans.

Their goal, their only hope, will be to trick the Republicans into doing what President George H.W. Bush did when he went to Andrews Air Force Base in 1990 and negotiated a “budget deal” that raised taxes. It is easy to beat someone in a race if they commit suicide along the way.

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