Quell reckless appetite for taxes

Let’s get this straight: Washington Democrats want to raise taxes (or eliminate tax breaks) in order for the federal government to borrow and spend more money.

House Republicans aren’t buying it and neither should the public. Considering the overwhelming size and reach of the federal leviathan, the reality is that Washington doesn’t have a revenue problem, it has a spending problem.

There are also certain political realities at play here. Even if House Speaker John Boehner was somehow nudged along to accept some form of tax increase as part of negotiations to raise the national debt ceiling, his election-minded caucus isn’t likely to go along with it.

“It’s just a bad idea,” Boehner said after Rep. Eric Cantor walked out on debt ceiling negotiations after Democrats insisted that taxes be part of the discussion. “It doesn’t have the votes and it can’t happen.”

So let the demagoguery continue. President Barack Obama responded by saying that without eliminating tax subsidies and loopholes for a series of class warfare bogeymen, all kinds of woes will befall those who rely on government.

“The tax cuts I’m proposing we get rid of are tax breaks for millionaires and billionaires, tax breaks for oil companies and hedge fund managers and corporate jet owners ...”

So, the government and presumably the economy would be better off if the IRS went after these bad guys. We doubt it. Potential revenue from eliminating tax breaks for oil companies, hedge fund managers and jet owners would be paltry in terms of offsetting deficit spending, according to a Washington Post fact check.

Let’s get back to that reference to “millionaires and billionaires,” which is where the real revenue would come from. That’s because the White House proposes to eliminate the ability of couples making more than $250,000 and individuals making more than $200,000 to itemize tax deductions, according to the Post.

Republican Sen. John Kyl correctly pointed out that increasing the tax burden on just about any type of private enterprise will be an expense that will trickle downhill to consumers. Higher gas prices and higher food prices, for example, have impacts similar to an outright tax increase; they bite into a consumer’s discretionary spending ability and hinder the overall economy.

Moreover, the wave of Obama administration regulations on everything from health care to Environmental Protection Agency regulations have a similar effect.

Despite the pressures that may result from Democratic rhetoric pitting companies against kids, we don’t think Boehner and the House Republicans are bluffing. They want debt ceiling talks to center on spending cuts, and will reject anything resembling an increased tax burden on American private enterprise at this time. To do so would be political poison for them, to say the least.

And it should be stressed that President Obama has said that the so-called Bush tax cuts that were extended last year will not be extended again at the end of 2012 if he is re-elected. Without the president’s signature to extend those breaks, they will indeed expire.

So in other words, actual tax rate increases are already on the horizon and many economists believe that is having a chilling effect on investment, job creation and economic growth. Shouldn’t that be taken into account in the current debt ceiling debate? Shouldn’t that be a strong card to play as the GOP contends that spending cuts should be the only consideration in negotiations related to the government’s borrowing and spending ability?

In any case, it should be clear that government and a reckless appetite for taxes — regardless of economic impacts — should not be priorities in the debt ceiling debate.