Tax the Wealthy to Finance Baby Boomer Welfare?

Remember the Republican Pledge to America, the conservative retort to the president’s failed American Promise (see: The Lie Behind the President’s American Promise)? The GOP contract talked about “unparalleled recklessness with taxpayer dollars,”¹ proclaiming:

The need for urgent action to repair our economy and reclaim our government for the people cannot be overstated.²

Now we are hearing about frameworks for decision making. Calls to tax the wealthy have led to talk of closing tax loopholes to put revenue on the table. Above all is the bipartisan urgency to do nothing by cancelling supposedly irreversible tax hikes and spending cuts from a bill that John Boehner called “a positive step forward”³ last year, another sham piece of legislation to convince us that Congress was taking action on the national debt.

During a November 9, 2012 address the House Speaker told us:

A stronger economy means more revenue – which is exactly what the president is seeking.  And without a strong economy, we’ll never be able to balance the budget and erase our country’s debt.4 

We are going to be waiting a long time for that stronger economy. What are we going to do about deficits and debt in the here and now, with baby boomers preparing to strain the limits of already stretched entitlement spending?

What happened to GOP intransigence on the national debt?

In November 2010 a jubilant GOP seized the House buoyed by Tea Party rhetoric, but in a recent interview Speaker Boehner distanced Republicans from the party’s fiscal conscience. The GOP seems poised to disavow the strong language in their pledge beginning with a concession on closing tax loopholes, despite minimal change to the political balance in Washington. Did an election loss that should have been no surprise to anyone cut the soul out of the GOP?

It was never about taxes. It’s about where the taxes go.

Neither party is telling us the truth about the expiring Bush tax rates. A tax hike won’t destroy the middle class. It will not put most companies out of business. We will not put wealthy Americans in the poor house by closing tax loopholes. A tax rate hike could trigger another recession, but that is the fault of the lackluster Obama recovery, not the tax code.

Opposing demands to tax the wealthy is not about the money. It is about lawmakers coming to us with their hands out while overseeing billions in waste and special interest spending and misrepresenting whatever feeble policies they cook up to appease the country over the national debt. Do not believe that Democrats will use whatever revenue they seize from taxing the wealthy to reduce the deficit. Do not believe that the appearance of GOP willingness to work with the White House by closing tax loopholes or finding another revenue source comes from some deeply held belief that productive bipartisan compromise is possible. It comes from fear over an election loss and the future of the Republican Party.

Tax the wealthy to finance welfare for baby boomers?

Democrats have gone out of their way to be the party for America’s seniors. They stand resolute in their refusal to entertain significant reforms to entitlement spending even though the share of the population eligible for benefits is swelling. The Congressional Budget Office warns of the impact entitlement spending could have on the national debt:

Unless policymakers decrease spending from projected amounts, increase revenues well above their historical average as a share of GDP, or adopt some combination of those two approaches, federal debt will become unsustainable.5

Historic revenue increases are not going to happen. Neither are spending cuts of a magnitude that will make a difference. Nevertheless, Harry Reid claims that heeding cries to tax the wealthy by axing the Bush tax rates on higher incomes will take care of Social Security’s portion of the entitlement spending problem:

FACT 3: The entire Social Security shortfall over 75 years is less than the cost of extending the Bush tax cuts just for those with incomes over $200,000.6

This is a bad thing to promise baby boomers, who may be inclined to save less because of assurances of federal benevolence.

Reid makes a similar claim about Medicare:

Republicans would trade away the health and safety of today’s seniors for the sake of tax breaks for billionaires, wealthy oil companies, corporations that ship jobs overseas and corporate jets owners.7

Republicans are in the impossible position of promising responsible fiscal policy while maintaining a grip on their senior citizen support base. Democrats stick together and don’t back down on their principles, no matter how extreme, self-serving, or wrong-headed. If Republican leaders think they can regain support by buying into another watered-down compromise on spending and deficits, they need to screw their heads back on and remember their Tea Party conscience (see: Tea Party Terrorizes Democrats With Fiscal Restraint).

Compromise that accomplishes nothing is how we got where we are now. It might be easier to do the right thing if both parties had some minimal intention of living up to their promises. When they applaud making a decision in the best interests of Americans they should not be referring only to themselves.

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