The Tax Deal Plus Ethanol: Kill the Bill!

December 10, 2010

I have had a busy week and not much time to post updates. All this time I have had mixed views about the Obama-Republican tax deal, but one piece of news has finally pushed me over the edge to oppose the deal: the Senate is adding ethanol subsidies into the bill.

Senators and Congressmen Slobbering Over the Tax Deal

If anyone still has any doubts that the tax deal has become Obama’s vehicle to pass another pork-laden stimulus, this should remove all doubt. Ethanol is a fuel derived from corn that pollutes more than conventional oil, raises food prices, creates food shortages in poorer countries and benefits absolutely no one other than the ethanol industry which has been busy collecting tax subsidies. Even Al Gore has admitted that he was wrong to support ethanol subsidies.

If Republican support a bill that contains ethanol subsidies, then they have surrendered much of the credibility as the small government, less spending party that the voters have supported in the recent election. And this even before the new Congress takes office!

What’s good about the tax deal? Not much. It only extends current tax rates by two years rather than making them permanent. It raises the death tax from zero to thirty-five percent on estates over five million. That may seem a high threshold, but the fact is that it will cause the liquidation of farms and small businesses. And, in any case, what right does the government have to expropriate a major portion of someone’s estate who has already paid taxes on his earnings?

The deal also further extends unemployment benefits, thereby contributing to higher unemployment in years to come. It keeps tax credits for specific causes deemed worthy by the Obama administration. Obama has tried to move away from the type of tax cuts that create economic growth, i.e. permanent reductions in marginal tax rates and substituted central-command-style tax credits and cuts for causes supported by the central government. If you do things the central committee approves you get a bone thrown to you, but, if you don’t, the government punishes you by taxing you more heavily. This is nothing more than central planning socialism.

Finally there are no spending cuts, making this in effect Obama’s new stimulus that he could never pass if it were presented as such.

Why are Republicans caving so quickly in a lame duck session that, while legal, lakes legitimacy since a large number of members of the current Congress have been fired by the people in November? Where happened to the Pledge Republicans took during the election? Did they not mean it? In an interview with Arizona Congressman Jeff Flake, who opposes the deal, radio talk show host Hugh Hewitt asks about specific promises in the pledge that this deal breaks:

… the Republicans during the campaign issued a Pledge To America, and I want to read to you five specifics from that pledge. From Page 16, permanently stop all job-killing tax hikes, Page 21, act immediately to reduce spending, Page 21, cut government spending to pre-stimulus, pre-bailout levels, Page 33, read the bill, Page 33, advance legislative issues one at a time. Does the deal that we’re talking about comport with those five guarantees?

Flake argues that Republican are not in charge yet. True, but then why not wait until January 4, when Republicans control the House and have increased influence in the Senate? The House could then pass a bill to retroactively extend all current tax rates permanently and dare Harry Reid and the President to filibuster or veto a bill that prevents a huge tax hike that could well put us back into a recession.

We hope that Republicans will have more spine in the Congress. It is hard to believe that the over eighty newly elected Republican members and six new Republican senators, who were elected with support from the Tea Party movement, will agree to deals with Obama made in secret such as this tax deal.

It is amusing how opposed the Democrat Left is to the tax deal. Talking heads on MSNBC and the Democrats they interview spew hatred of successful Americans and outrage at Obama over the temporary extension of current rates. Obama has been angry and petty in his speeches and press conference and is losing his Left base which is already angry at him over the war in Afghanistan, the continued operation of the Guantanamo Bay terrorist prison and the failure to repeal the military’s “Dont Ask, Don’t Tell” policy.

It is good to see the left fighting with the President, but that is not a good enough reason to support a bill that has yet to be written. If this were the best deal we could get, it would be defensible to support it to prevent a tax increase. But this is not the best deal and Republicans in Congress should kill the bill and pass something better in January.

The Tea Party movement should pressure Republicans to keep the promises they made during the election to reduce the power and size of the federal government and return America to fiscal sanity.

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