GOP May Vote for Tax Increase

Are Republicans stupid or weak? Maybe it’s a little bit of both. They’re certainly slow learners.

Once Republicans secured a tax reduction, they should never let it go. I realize that the payroll tax holiday is a reduction in Social Security income that’s used to fund the bankrupt program, but instead of giving up this reduction, they should push for spending cuts to make up for the shortfall.

Sen. Chuck Schumer (D-NY) understands how to play the game. He and his fellow Democrats have put forward a plan to extend the payroll tax cut into 2012 to be paid for by a surtax on those with incomes greater than $1 million. Schumer knows how to frame the issue. Republicans do not:

Sen. Chuck Schumer, D-N.Y., said he finds it difficult to grasp that Republicans would oppose a tax cut.

“They’ve spent so much time fighting to preserve the Bush tax cuts for the millionaires, it’s hard to believe they wouldn’t want to preserve a tax cut for the middle class,” he told NBC’s “Meet the Press.”

“I think it’s very hard for Republicans to vote against this given their past history of defending the tax cuts for the wealthiest among us. If they don’t, if it doesn’t pass once, we’re going to put it on the floor again and again, and we would be open to other ideas of paying for it if this one fails,” he added.

Democrats have contended that Republicans are afraid to raise taxes on high-income Americans because it would violate a no-new taxes pledge proposed by the conservative Americans for Tax Reform, which is led by Grover Norquist.

One report says the reason Republicans may not support a continuation of the payroll tax reduction is because “the payroll tax holiday hasn’t done anything to stimulate job growth.” How dumb is this?

There’s no way to tell if this is the case. Maybe the extra money kept the unemployment rate steady instead of going up. It’s possible that people paid off some credit card debt. The average family carries $16,000 on their cards. Paying down debt and delinquent loans do not necessarily spur job growth. Businesses are still afraid to hire because they don’t know what the future holds, especially since there’s talk of not extending the Bush tax cuts and adding even more taxes to the already huge pile. A policy here or a policy there does not spur confidence among owners of businesses. I know. I’m one of them.

The surge in Black Friday spending is most likely the direct result of the payroll tax holiday. One article carried this headline: “‘Black Friday’ Sales Up 7 Percent Over Last Year.” Republicans should be shouting the connection from the rooftops. Lower taxes produce results. Notice how the stock market is responding. As I write this, it’s up more than 300 points.

In the end, Republicans don’t know how to argue their case. The real issues are spending on unconstitutional programs, taxes are too high on every person who pays taxes, and those who aren’t paying any federal taxes — about 47 percent — should pay at least some tax.

What we need is comprehensive tax reform that eliminates political sophistry like that of Schumer and the stupidity of too many Republicans. This would mean going to some form of a consumption tax. The tax is paid when an item is purchased. Such a system would have to be coupled with a massive reduction in government spending.

If the Republicans want a platform to run on, this is it!