Senator Coburn’s Ahistorical, Unworkable Tax Hike Plans

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Senator Coburn’s Ahistorical, Unworkable Tax Hike Plans

Written By : Warner Todd Huston

Senator Tom Coburn (R, OK) is trying to break heavy with the Tea Partiers — and for that matter his own party — by encouraging Republicans to include massive tax hikes in the on going budget discussions in congress this year.

Coburn appears to feel that a tax hike simply must be part of the discussion to get a deal this year simply because the Democrats control both the White House and the Senate. Apparently Coburn is afraid that a deal must happen this year or the U.S. will become a third world nation over night.

Unfortunately, Coburn’s ideas on the budget have no historical basis at all. Tax hikes have never helped raise a down economy. It seems Coburn is far more interested in the relative success of a deal to solve our economic situation than in what a tax hike means for both the country and his party and whether it will even work or not.

Coburn is fighting both his party and several anti-tax advocacy groups like Americans for Tax Reform.

In a recent National Review article, Ryan Ellis, Tax Policy Director for Americans for Tax Reform, clearly shows a tax history that makes Coburn’s position untenable. (Do read Ellis’ article. It has some great info on how constant tax hikes and spending hikes have brought us to the mess we are in today.)

Ryan reminds us how politicians in 1982, 1990, and 1994 were sure that a tax hike was necessary to save the country. Ryan also points out that in nearly every case the same politicians promised to make cuts in spending to make the tax hikes less painful. Sadly, such spending cuts never materialized. What we ended up with was both higher spending and higher taxes.

I spoke to Mr. Ryan about ATR’s position. “We don’t have an undertaxing problem, we have an over spending problem,” he said. “We need to cut spending because congress has an out of control spending problem.”

We’re trying to do the best we can every day to tell people that we need to cut spending. We need to cut spending because we have an over spending problem not an undertaxing problem. Taxes are coming in at historical levels, so tax receipts are just fine. They are down a bit now because the economy is down but we are on target to see historical levels later on in the decade.

ATR isn’t the only anti-tax hike voice out there. Coburn’s Senate leader is also saying that there will be no talk about tax hikes. Last Wednesday, Senate GOP leader Mitch McConnell (R, KY) said, “I think I can safely say this Congress is not going to raise taxes. So why are we still talking about this?”

In fact, McConnell’s position is not unusual. Rather they are quite ubiquitous. Few GOP voices have joined Coburn in his desire to institute a massive tax hike on the American people. Senator Tom Coburn is virtually alone among Republicans for his looking to quash any recovery in an avalanche of new tax hikes.

Let us hope that Coburn stays the lonely, odd man out on this.

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Anonymous

Coburn is being played like a fiddle by Democrats, and his defection is only going to exacerbate the split between Establishment and Tea Party Republicans.

The Democrat game here is transparent as it is predictable. Create a crisis and use your own obstinance to create a fait accompli. They are simply refusing to cut spending, and will only vote for raising the debt ceiling if taxes are raised. Never mind that they were the ones turned a $165 billion deficit into a $1.5 trillion deficit in three years.

The Democrats are 100% responsible for this situation, and Republicans can’t let themselves get blackmailed into destroying the country in exchange for a temporary band-aid. If the GOP sells out again on this issue, they are useless as a political party and need to be dissolved.

President Friedman

Again, I’d ask for specifics on what kind of tax increases Coburn is talking about. I’m generally for doing away with corporate subsidies, and that can be viewed as a tax hike. And if we’re talking about doing away with certain tax deductions, I’d like to know which ones and who they will effect and how many dollars in tax cuts could be extracted in exchange for supporing them. Depending on the answers to those question, I might not oppose it.

If he’s talking about increasing the “above the line” income tax rate on anyone, I would oppose it. But I’d alse be really surprised.

gfchicago

There is one problem with doing away with “Corporate Subsidies” those costs are generally always passed on to the consumer. We have the have the 2nd highest corporate tax structure in the world.

So I think that is a bad idea all the way around.

President Friedman

Subsidies and corporate tax rates are two seperate issues, and if we have to wait for the government to try to tackle them both at the same time we will probably never get movement on either (it’ll be just like ‘Comprehensive Immigration Reform’).

Subsidies do enormous harm because they handicap the marketplace from performing one of its most critical jobs: delivering accurate information about the value of goods and services via price mechanisms.

The fact that gasoline would be more expensive without government subsidies tells us that the marketplace isn’t currently delivering the correct information to us about the value of gasoline. Ultimately that will effect our ability to make decisions about energy policy, both at the governmetn and individual level.

Subsidies also allow the government to pick winners and losers. If you’re going to give subsidies to oil companies then you should give equal subsidies to every industry that produces any kind of resource that can be converted into energy.
http://www.wordaroundthenet.com Christopher Taylor

Either way I don’t care. We shouldn’t be using subsidies to prop up companies and pay corporations to do things. Ever.

Joebritton

Spoken like a true deluded poor SOB. Why do poor men so vigorously support the wealthy, is a question I have never been able to answer. Any help here?

Anonymous

Why do idiot liberals so vigorously support the economy-crushing, job-killing, increasingly despotic policies of their politicians? Its a question I’ve never really had to ask, because the answer is obvious: They and their ilk are actively seeking to destroy mighty America’s exceptionalism and cast her low.
Anonymous

Why do idiot liberals so vigorously support the economy-crushing, job-killing, increasingly despotic policies of their politicians? Its a question I’ve never really had to ask, because the answer is obvious: They and their ilk are actively seeking to destroy mighty America’s exceptionalism and cast her low.
Anonymous

Why do idiot liberals so vigorously support the economy-crushing, job-killing, increasingly despotic policies of their politicians? Its a question I’ve never really had to ask, because the answer is obvious: They and their ilk are actively seeking to destroy mighty America’s exceptionalism and cast her low.
http://www.facebook.com/people/Michelle-Hart/100001365605444 Michelle Hart

What’s the name of the homeless person you work for moron???

see you mugshot below

Joebritton

It is inconceivable that the right just can’t comprehend the fact that we are in this fiscal mess for 30 years of taxcuts for the wealthy and corporations. Look at any graph of wealth and income inequality over that period. Not convinced, look at stats relating to the loss of our middle class, and the increase in people living belod the poverty line.

Just look!

Anonymous

And while you’re looking, take a gander at the increase in government spending, specifically in entitlement programs over that same period. Oh, and don’t forget to check on the accural of revenue depleting government jobs brought on by the upsurge of growth by the Federal government.
We can’t tax our way out of this mess no matter how much the wealth-enviers lie. Spending has got to be drastically cut as well.

President Friedman

Do you have any details about who and what type of tax increases Coburn supports? He got pretty sideways with Gover Norquist a few weeks ago because Coburn wanted to end ethanol subsidies, and Norquist called that a tax increase. I just wonder if this isn’t something similar, especially when there are no specifics given about what Coburn is supporting.

With that said, it wouldn’t surprise me terribly if Coburn was for doing away with some tax deductions. He’s always voiced a concern over the way our tax deduction system works and how it skews price information in the marketplace (for instance, can there be any doubt that the mortgage interest deduction contributed to the housing bubble?). And while he is definitely a small government guy, he also probably cares more about balancing the budget than making the government smaller. In otherwords, if he believed a tax increase could help balance the budget, Coburn would be more likely than many other conservatives to support a tax increase.

Either way, I’m still pissed at Coburn over his TARP vote, and while I appreciate all he has done over the years in the House and the Senate, I’m kind of glad he is in the last rotation of a self-imposed term limit. You just can’t spend over a decade in D.C. without acquiring a good deal of stink.

Anonymous

I was happy to see an end to the ethanol subsidies. But what they forgot to end was the mandate that all our fuel has to contain ethanol. I would love to put real gas in my tank and would drive out of my way to go to a station that offered it. I say that we should let the market decide on all these energy sources instead of having the government pick the winners and losers. We need to end all energy subsides.

President Friedman

Big, I wonder if that mandate is from the state or federal level? Here in Oklahoma about 1 out of every 3 gas stations advertises “100% Gasoline” for a bit higher price than the ethanol infused stuff.

Anonymous

Individual states might have them, but they definitely exist at the Federal level, which is also where the insane benchmarks exist that are diverting 40% of the corn crop into ethanol production.
Anonymous

I must be at the state level then. Because I have lived in 3 states since ethanol came on the scene and all have required at least 10% ethanol. I wouldn’t be surprised if the EPA has its hand in there too mandating this. I have lived in urban areas and it might be a smog thing.
Anonymous

I must be at the state level then. Because I have lived in 3 states since ethanol came on the scene and all have required at least 10% ethanol. I wouldn’t be surprised if the EPA has its hand in there too mandating this. I have lived in urban areas and it might be a smog thing.

http://www.facebook.com/people/Michelle-Hart/100001365605444 Michelle Hart

All of that is due to the idiotic CAFE standards that are partially Fed & partially state. That’s why you cant ship gas across state lines unless it meets the cafe standard of both.

Remember whenBush had to suspend them when Katrina hit?? The fuel was illegal to sell in lousiana so even though it was available it didnt meet the cafe standard of the target states.

Plus the states get fed funding as an inducement… Same thing as speed limits and seatbelt laws. More fed dollars if they go along with the idiocy.

Anonymous

Sorry Pres, but Coburn and his Gang of Six are making a baldfaced cash grab. Many of the deductions he’s targeting are long-standing individual items like mortgage interest, charitable contributions, and health insurance. He also wants automatic tax triggers, which create even more hikes if the take isn’t large enough.

Argue the semantics all you want, but what Corburn wants is a dagger driven right into the heart of the American middle class…and all without any concrete reductions in spending.

President Friedman

I don’t think asking for details should be considered arguing the semantics.   Can you provide a source where Coburn has advocated doing away with the mortgage interest deduction, charitable contributions, and health insurance?

I’m not saying he hasn’t, or that he wouldn’t, I’m just saying that historically Coburn is the kind of guy who would only put that kind of stuff on the table in exchange for guarantees of incredibly substantial cuts.  He isn’t a big government guy and he isn’t running for re-election (and increasing taxes would not help him in Oklahoma if he was), so there is something off about what is being reported here. I’d just like to see more details.

(And for the record, under the right circumstances I could support doing away with the mortgage interest deduction. I’d like to see that offset by bumping all the tax brackets down a percentage or two, but ultimately I think it is a bad idea t )

Anonymous

Coburn is negotiating with the “Gang of Six”, which is in favor of the Simpson-Bowles plan:

- Raising the overall tax revenue target to around 21% of GDP (18-19% is the historic average).

- Raising $250,000+ earners (including small businesses) to 39%

- Raising the capital gains and estate taxes

- Keeping all Obamacare taxes in place

- “Haircut” deductions to all personal deductions, which is what would include mortgage, charity, etc

Coburn now supposedly “is taking a break” from the Gang of Six negotiations…while he still claims to be a member of the group, and goes around backing the foundation of the plan on every talk show that will have him.
Anonymous

Coburn is negotiating with the “Gang of Six”, which is in favor of the Simpson-Bowles plan:

- Raising the overall tax revenue target to around 21% of GDP (18-19% is the historic average).

- Raising $250,000+ earners (including small businesses) to 39%

- Raising the capital gains and estate taxes

- Keeping all Obamacare taxes in place

- “Haircut” deductions to all personal deductions, which is what would include mortgage, charity, etc

Coburn now supposedly “is taking a break” from the Gang of Six negotiations…while he still claims to be a member of the group, and goes around backing the foundation of the plan on every talk show that will have him.

President Friedman

I think you should look deeper into Coburn’s involvement with this group. He sat down to negotiate with them but left when they couldn’t come anywhere close to an agreement on the amount of cuts necessary. The Simpson-Bowles plan would create $4 Trillion in spending cuts over 8 years but Coburn has said he won’t sit back down w/ the Gang Of Six unless they are willing to put $9 Trillion in cuts over 10 years on the table (a number that would effectively balance the budget).

Now, I can see Coburn agreeing to some tax increases in order to get to that goal, but let’s admit that it is wholly unlikely that any Democrat is going to agree to such a high level of cuts.

It’s also worth noting that Simpson-Bowles, which Paul Ryan admits to borrowing from in his Roadmap, does do away with a lot of deductions, but also includes across the-board cuts in income tax rates to compensate for this. One of the things I really liked about Simpson-Bowles is that it would greatly simplify the tax code and put a shitload of accountants out of work.
President Friedman

I think you should look deeper into Coburn’s involvement with this group. He sat down to negotiate with them but left when they couldn’t come anywhere close to an agreement on the amount of cuts necessary. The Simpson-Bowles plan would create $4 Trillion in spending cuts over 8 years but Coburn has said he won’t sit back down w/ the Gang Of Six unless they are willing to put $9 Trillion in cuts over 10 years on the table (a number that would effectively balance the budget).

Now, I can see Coburn agreeing to some tax increases in order to get to that goal, but let’s admit that it is wholly unlikely that any Democrat is going to agree to such a high level of cuts.

It’s also worth noting that Simpson-Bowles, which Paul Ryan admits to borrowing from in his Roadmap, does do away with a lot of deductions, but also includes across the-board cuts in income tax rates to compensate for this. One of the things I really liked about Simpson-Bowles is that it would greatly simplify the tax code and put a shitload of accountants out of work.
President Friedman

I think you should look deeper into Coburn’s involvement with this group. He sat down to negotiate with them but left when they couldn’t come anywhere close to an agreement on the amount of cuts necessary. The Simpson-Bowles plan would create $4 Trillion in spending cuts over 8 years but Coburn has said he won’t sit back down w/ the Gang Of Six unless they are willing to put $9 Trillion in cuts over 10 years on the table (a number that would effectively balance the budget).

Now, I can see Coburn agreeing to some tax increases in order to get to that goal, but let’s admit that it is wholly unlikely that any Democrat is going to agree to such a high level of cuts.

It’s also worth noting that Simpson-Bowles, which Paul Ryan admits to borrowing from in his Roadmap, does do away with a lot of deductions, but also includes across the-board cuts in income tax rates to compensate for this. One of the things I really liked about Simpson-Bowles is that it would greatly simplify the tax code and put a shitload of accountants out of work.

Anonymous

Coburn is negotiating with the “Gang of Six”, which is in favor of the Simpson-Bowles plan:

- Raising the overall tax revenue target to around 21% of GDP (18-19% is the historic average).

- Raising $250,000+ earners (including small businesses) to 39%

- Raising the capital gains and estate taxes

- Keeping all Obamacare taxes in place

- “Haircut” deductions to all personal deductions, which is what would include mortgage, charity, etc

Coburn now supposedly “is taking a break” from the Gang of Six negotiations…while he still claims to be a member of the group, and goes around backing the foundation of the plan on every talk show that will have him.

President Friedman

Also, it is worth noting, Coburn walked away from the ‘Gang Of Six’ last month because he determined the Democrats were not serious about making big enough cuts.

http://washingtonexaminer.com/blogs/beltway-confidential/2011/05/coburn-walks-away-gang-six-budget-talks
President Friedman

Also, it is worth noting, Coburn walked away from the ‘Gang Of Six’ last month because he determined the Democrats were not serious about making big enough cuts.

http://washingtonexaminer.com/blogs/beltway-confidential/2011/05/coburn-walks-away-gang-six-budget-talks
President Friedman

Also, it is worth noting, Coburn walked away from the ‘Gang Of Six’ last month because he determined the Democrats were not serious about making big enough cuts.

http://washingtonexaminer.com/blogs/beltway-confidential/2011/05/coburn-walks-away-gang-six-budget-talks

http://www.wordaroundthenet.com Christopher Taylor

I agree, we don’t have enough information to be screaming about Cobern yet. After all, this information is coming to us from people who hate his guts and want him to look bad. Their every goal is to get conservatives demoralized and not voting in 2012.

Don’t fall for it, make sure what you hear is accurate.

http://www.angry.net/blog2 Angry Webmaster

two questions:

1) When is Coburn up for reelection?
2) Who is going to challenge him in the primary?

This fool needs to be retired.

President Friedman

Coburn has self limited himself to two terms in the Senate, the second of which expires in 2016.
President Friedman

Coburn has self limited himself to two terms in the Senate, the second of which expires in 2016.
President Friedman

Coburn has self limited himself to two terms in the Senate, the second of which expires in 2016.

Toastrider

If he keeps his word, he’ll be almost unique among politicians.

Joebritton

Grin and bear it, poor folks, valets, maids, and butlers, who carry water for your wealthy employers.

……the nation’s income distribution may be quite lopsided, but its wealth distribution is even more so.

The top 1 percent of earners receive about a fifth of all American income; on the other hand, the top 1 percent of Americans by net worth hold about a third of American wealth. (Note that the top income earners are not necessarily the same people as the top net-worth Americans — after all, lots of high-net-worth people don’t work or have much else in the way of sources of new income.) Wealth-related inequality has also been relatively stable over the last few decades, whereas income-related inequality has been growing since the ’70s.
Why is there more inequality in wealth than in income, both today and yesterday?

Remember that wealth accumulates over time. The highest earners are able to save much of their incomes, whereas lower earners can’t. That means high earners can accumulate more and more wealth as time goes on (assuming they don’t blow it all, of course).

Higher-earning Americans also have the resources to pay for better tax preparation, which helps them reduce their taxes and save even more money. On the tax front, note also that people who have already accumulated wealth stand to earn a lot in capital gains, which are also taxed at a lower rate.

http://economix.blogs.nytimes.com/2011/03/30/inequality-is-most-extreme-in-wealth-not-income/

Anonymous

Flagged for being a petulant, class-envying scumbag. Get a job and make your own money, ya leech
StanW

The reason that people (and that means ANYONE) can save anything from their income is because they have learned a little secret that eludes idiots like you…
They spend less than they take in!!!!!

Do that and you have money to save. Don’t to that and you are perpetually behind.

Simple!

http://www.facebook.com/people/Michelle-Hart/100001365605444 Michelle Hart

Normally I would agree Stan, but the problem is no matter how much WE cut spending there just isnt anything left to save after inflation, and all the other taxes we are forced to pay.

StanW

I agree Michelle, and those are not the people I am referring to here.

I am talking about the people that don;t make very much money, but deliberately live ABOVE what they can afford.

For instance… there was a community program to help fix up the homes of the economically challenged people in our area. I participated in this program. But I quit when we were to be assigned to work on a house in disrepair that had a brand new car in the driveway and a high-definition televiosion and blu-ray playing in the livingroom.

And while that is anecdoatl, it is a reoccurring pattern I see with “The Poor”. They demand more and more from the government, yet make sure that they have all the nice things they want to have. Much like the person I saw interviewed a few years ago demaning healthcare for thier child, which the could not afford because they were homeless, out of work and addicted to drugs. DRUGS???? Are they getting those for free?

It is hard to save with the government taking more and more and punishing every little success we have, but it needs to be done. And if I have to watch a five-year-old TV with rabbit ears to do it, then that’s what I’ll do. Many are not willing to deny themselves in order to save.

Anonymous

Well when you’re in a tight spot buy the luxuries first.

It’s a lot easier to con people in to paying your rent or grocery bills (use sad eyes) than it is to get them to buy you a new tv.

So buy the tv then go and tell a reporter that you can’t afford to eat (and it won’t even be a lie technically).
http://www.facebook.com/people/Michelle-Hart/100001365605444 Michelle Hart

Gotcha Stan, I wasn’t clear on the “who” and I see it all the time also… I actually had a guy at the bar actually ASK me for cabfair home!!

Seriously, the idiot came to the bar, drank all night and then wanted money to go home on??? DUHHH dont go if you cant pay idiot!!

I’ve cut waaay back on stuff to just keep up, once my bills are paid there isnt much left for shoes or other stuff that I want… the key phrase….

The stupid commies cant figure out the difference in a “want” and a “need”….

I “want” fancy dinners out…

I “need” to have basic food…

So I eat generic soup & crackers instead of a yummy Lobster Bisk…. Sure it’s nice to splurge but if you cant afford it why make it worse by stuggling to pay for it.

http://www.wordaroundthenet.com Christopher Taylor

Just dumb. Tax increases would fix nothing, the problem is overspending, period. That’s not hard to figure out and everyone can point to spending they think is stupid and excessive. Cut there, after you in congress take an across-the-board paycut and cut back on staff and benefits.
Anonymous

Without a balanced budget amendment (that is actually enforced) we aren’t going to get out of this.

We’ve proven time and time again that it is simply not possible to reign in spending voluntarily. It’s just too easy to use debt to buy votes.

So a bill that forces the government to spend nothing more than it takes in for any given year, with interest on the debt + some given percentage of that debt to slowing pay it off, being covered *first* then everything else is absolutely critical.

But I don’t see it happening.
Bill Dalasio

Color me a bit skeptical. Coburn has a well-earned and long-standing reputation as a fiscal hawk. We know that Coburn was at odds with Gover Norquist - Mr. Ellis’s employer – on ethanol subsidies (tax credits). Without more explanation of exactly what the “tax increases” Coburn is backing, I can’t tell if I’m being delivered a line of BS from ATR, a group that delivered little if any support to the Tea Parties, despite their ostensible alignment with their goals.
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