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House Republicans: Don’t Get Suckered On Tax Increases

Is Republican Speaker of the House John Boehner really serious about going along with raising taxes in the vain hope that the new revenues will go towards reducing the deficit?

Congressional spendingBoehner’s comments are likely only the first wave of a coming avalanche of establishment pressure to raise taxes; all of which will be accompanied by promises that this time Obama really wants to balance the budget and Congress really will stop spending.

Don’t believe it.

Back in the late 1980s, Richard Vedder and Lowell Gallaway of Ohio University co-authored a study for Congress’ Joint Economic Committee that found that every dollar of new taxes imposed led to more than one dollar of new spending. Over the ensuing years, that study has been updated and the results are always the same.

In November 2010, Vedder and The Wall Street Journal’s Stephen Moore released an updated and more sophisticated version of the study, showing that “over the entire post World War II era through 2009 each dollar of new tax revenue was associated with $1.17 of new spending. Politicians spend the money as fast as it comes in – and a little bit more.”

What Moore and Vedder found was that no matter how you controlled for the economic variables, spending always went up faster than revenue. The alternative models produce different estimates of the tax-spend relationship – between $1.05 and $1.81. But no matter how they configured the data and no matter what variables they examined, higher tax collections never resulted in less spending.

As Vedder and Moore noted, “The only era in modern times that the budget has been in balance was in the late 1990s, when Republicans were in control of Congress. Taxes were not raised, and the capital gains tax rate was cut in 1997. The growth rate of federal spending was dramatically reduced from 1995-99, and the economy roared.”

The problem we have today is that all too many Republicans refuse to hold to the conservative principles that were proven to work back in the late 1990s. They don’t seem to understand that liberals and the Democratic Party exist solely to divide-up the spoils extorted from taxpayers by the welfare state and that cutting federal spending undermines their very reason for being. Or perhaps deep down inside, these establishment Republicans are all too ready to enter into “grand bargains” to raise taxes because they share those same impulses.

Let's get Real!

I agree with Tim.  The conservatives need a real leader of THE PEOPLE, not the rich elitest's. 


Mitt Romney doesn't care about simplifying the tax code and force ALL to pay their fair share. He


also doesn't call out the Federal Reserve for the SHAM it is!  Only Ron Paul does that!  We can't keep


deluding ourselves!!  Time to wake up and start electing CITIZEN REPRESENTATIVES!!  Let's help get


conservative Citizen Representatives elected locally.  See the example of one at www.FredaForCongress.org.


Time to GET REAL!!!  Time to Save America!  Once and for ALL!!!

taxing the Rich ?

I think of myself as a tea-party guy through and through, and i think that real problem with the GOP is that they have been hijacked by the billionare donors and no longer work for their conservative base. I agree with Warren Buffet, i think that he should pay the same rate of tax as his cleaning lady, not a lower rate of tax, as he does currently.

Tax cuts for the rich are not conservative ideals , they are ideals of the super rich.  If you give them money ,guess what , they spend it on foreign sports cars , foreign holidays , and holiday homes in the south of France. What do you expect them to do ?, only a tiny propotion of that federal gift goes back to america. Oh , and of course , they spend a lot of that extra money buying influence with the GOP to make sure that the next Mitt Romney ignores his base , and tries to get them more tax cuts.

The Romney/Ryan tax plan only consisted of tax cuts for the wealthy, that's it. Swing voters knew who Romney really worked for and that's why the democratic attach ads were so convincing. Next time lets get a candidate who works for real conservatism.