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National Debt

The Gang of 6's Tax Hike

  • July 26, 2011

    With our leaders in Washington D.C. trying to craft a solution to our looming debt crisis, one idea gaining steam is nothing more than a bait-and-switch. This idea is being touted by the so-called "Gang of 6" which includes Sens. Mark Warner (D-VA), Dick Durbin (D-IL), Kent Conrad (D-ND), Saxby Chambliss (R-GA), Tom Coburn (R-OK) and Mike Crapo (R-ID). The group released a $3.7 trillion deficit-reduction plan to great fanfare Tuesday. President Obama cheered the proposal as a "significant step," and it instantly became a factor in the talks to raise the $14.3 trillion debt ceiling.

    However, this "solution" to our debt problem relies heavily on tax increases and future spending cuts. In short, it asks Americans to shoulder over a $1 trillion tax increase now in exchange for a promise by Congress to cut spending later. Under the Gang of Six proposal, the Senate Finance Committee would have six months to complete a tax-reform package that lowers individual and corporate tax rates, switches to a so-called territorial system and ends some tax credits and deductions. The Gang’s framework also proposes to "reform, not eliminate, tax expenditures for health, charitable giving, homeownership and retirement, and retain support for low-income workers and families."

    House Republican Study Committee Chairman Rep. Jim Jordan (R-OH) wrote in an oped in USA Today that: "If this bad deal sounds familiar, it should. In 1982, Congress and the president agreed to cut $3 of spending for every $1 of tax increases. The tax hikes were real, but the promises to cut spending vanished into thin air. The same thing happened again in the 1990 deal, and there is no reason to expect anything different this time."

    CapitolWatch implores our elected officials not to buy into the same bait-and-switch that tricked a past Congress. What these legislators fail to realize is that our government has a spending problem, not a revenue problem. Tax reform and less government spending are the solutions to this crisis – and the solution to restarting our economy. The sooner Congress and the President realize that – the sooner we’ll begin to unbury ourselves from the mountain of debt we’ve accumulated.

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