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On the Latest 'Budget Deal'

In an editorial today, the Wall Street Journal says: "Higher taxes now for notional reform later is worse than nothing." The lede paragraph pretty much says it all:

"It's clear by now that the budget talks are drifting in a drearily familiar Washington direction: Tax and spending increases now, in return for the promise of spending cuts and tax and entitlement reform later. This is a bad deal for everyone except the politicians who want more money to spend."

On the matter of tax reform, the Journal editorial says:

"What about tax reform next year? A final judgment on this prospect depends on the fine print, but it's already looking grim. The GOP has prepared the ground for a genuine tax reform, on the Simpson-Bowles model, that lowers rates in return for fewer deductions. In what is shaping up as this budget deal's prototype, tax reform looks like it means both higher rates and fewer deductions.

"This isn't reform. It's another tax increase next year disguised as reform. The Fortune 500 CEOs who are lobbying Republicans don't mind because they hope to get a cut in the corporate tax rate. But small businesses will be stuck with a huge immediate tax increase, at least until their owners can scramble to reorganize as corporations instead of Subchapter S companies or LLCs." (emphasis added)

While on the matter of spending and the roll of Tea Party members in the House, here's what the Journal writes:

"The biggest insult to the public's intelligence is Mr. Obama's demand for more spending now. We thought this exercise was about deficit reduction. But as always in Washington, the method is to put deficit "savings" into the future as part of a fanciful 10-year budget estimate while adding to the deficit in the near term by spending more now. (emphasis added)

"Mr. Obama wants an extension of jobless benefits worth $30 billion a year, plus $50 billion for public works (at union wage rates). He also wants to lift the sequester—the automatic spending cuts set to hit on January 1. And he wants the debt limit increased for at least two years, if not permanently. Oh, and he wants a permanent fix for the Alternative Minimum Tax that Democrats invented but now threatens blue-state middle-class voters.

"Remind us again what achievement the Tea Party Republicans could point to in all this? A smaller tax increase than Mr. Obama wants, as long as Republicans put their fingerprints on it too? Congratulations." (emphasis added)

Kudos to the Journal for an outstanding editorial that "tells it like it is." (HT Mark Levin Show, listen to his December 19, 2012 audio)

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