Our View: Solution — game of political ‘chicken’?
Yes, yes, we understand — and all too well — that elections have consequences. Thus, by virtue of his victory last week, President Obama has every right to assume the nation is all on board for raising taxes on “the rich.”
Yet the question persists: Given the fragile state of the economy, is this the right thing to do? We don’t think it is.
Nonetheless, the sheen from his Election Day triumph had not in the least diminished when the president started banging the drum for said taxes — initiating, as it were, a game of political “chicken” with the still-Republican House. Who will blink first?
Principle says the GOP should not, for the numbers are on its side. If Mr. Obama succeeds in getting income tax rates raised to his liking — on individuals making in excess of $200,000 annually and couples taking in $250,000 or more — it will net the Treasury less than $100 billion a year, or less than 10 percent of the current deficit. Is such a specious panacea worth risking the entire economy to implement, especially when income tax collections at the current rates are actually rising (see editorial above)? We don’t think so.
Thus, our question to Mr. Obama: Do you really believe this is the way to go, or are you, for some reason, simply intent on sticking it to the folks already pulling the fiscal wagon, and to Republicans as well?
What this economy really needs is the certainty of permanent tax rates, whether at current levels or lower, realized through genuine reform of the tax code. As The Wall Street Journal noted Monday, “The reality is that the fastest way to raise revenue is with faster economic growth. To the extent that raising tax rates will reduce the rate of growth, it will slow the flow of tax revenue and increase the deficit.”
That’s why Republicans should stand firm.