Calling Obama’s Bluff

Let’s recap what the winners in the recent election ran on. The Republican and conservative message was strongly against raising taxes and it was also for undoing ObamaCare. President Obama ran on raising taxes on the wealthy and saying he was a lesser evil than Romney. The Republicans maintained control over the House of Representatives. President Obama was reelected.

Interestingly, President Obama has no ability whatsoever to raise taxes on the rich. He can only agree to the will of Congress to raise taxes on the rich by signing such a bill if it reaches his desk. So basically he campaigned on doing something he has no power to do, but that doesn’t stop him from trying to convince you that he can.

The clever Democrat strategy is to go over the fiscal cliff, but with a “parachute.” By going over the cliff the Bush tax cuts will expire raising taxes on everyone. Then, the Democrats believe, they will have the Republicans in a box. They will not support any tax cut on the rich and they will support extending the Bush tax cuts on anyone making less than $250,000. If the Republicans don’t pass such a bill it will be the Republican’s fault that taxes went up.

A Boehner Preemptive Strike

Boehner should lead the Republicans to pass a bill before year-end making the Bush tax cuts permanent. All tax bills under the Constitution have to originate in the House of Representatives (Article I, Section VII). Then they and the RNC and every other media outlet we can muster should get the following message out:

In these tough economic times, the worst thing to do is to raise taxes on anyone. To believe we can tax our way out of this fiscal mess is fantasy. What we have is a spending problem. The best way to increase tax revenue is to grow the economy and you don’t do that by raising taxes. Historically, whether tax rates were 91% or 28% the same amount of revenue, about 19% of GDP was taken in. Therefore, we have passed this bill to keep taxes low and to help grow the economy. If the President and the Democrats in the Senate are serious about growing the economy and solving our economic problems, they will pass this bill. Otherwise taxes will go up on all Americans, and they will have to answer for it. We pledged to the American people we would hold the line on taxes for all Americans. The American people responded to that pledge by keeping the House, where all tax bills originate,  in Republican hands. We have just done what the American people sent us here to do. Now it is time to focus on spending and how we can get that down to the historical level of revenue. For without doing that, we will never balance the budget, and America as we know it will cease to exist.

Pound that message home every hour of every day, until we can recite it by rote. When the Democrats talk about the glorious days of balanced budgets under Bill Clinton, the amount of spending as a percent of GDP was 19.1%, 18.5%, 18.2%, and 18.2%, the four years there was a budget surplus under a Republican Congress and President Clinton. It wasn’t the tax rates under Clinton that the Democrats pine for that gave us a balanced budget, it was restrained spending.  Under Bush, who was no fiscal conservative, spending ranged from a low of 18.2% of GDP to 20.8% of GDP. Under Obama it has been between 24.1% to 25.2%  of GDP. It is not a revenue problem, it is a spending problem. Yet, everyday in the news we are talking about what we are going to do about taxes. Tinkering with the tax codes won’t solve the problem, unless everything we own becomes subject to taxation: wealth, retirement accounts, dividends, savings, and every product and service we buy.

Without standing up and educating the American people that we are working on the wrong problem, they will continue to believe the big lie that taxing the rich is the solution. Taxing the rich is only the prelude to taxing everyone else. When that approach fails Obama can say, “Well, we taxed the rich and it wasn’t enough. It is now up to every American to do their patriotic duty and pay more.” It’s easy to say tax the rich, tax the other guy. How do most Americans feel about their own taxes going up? The rich may not like it, but they can afford it.

The question is, do the Republicans have the guts to tell the truth, take a stand, and convince the American people that it is massive government spending that is driving us over a cliff?

That’s my opinion; I’d like to know yours. Please comment below.