On Tuesday, President Obama called for tax hikes to replace some of sequestration’s spending reductions. Today, Senate Democrats are taking that call one step further, and are planning on $60 billion in tax hikes in 2013:
CBS News has learned that the Senate Democrats’ long-awaited plan to avert the sequester, which leaders will present to their caucus today, would replace the 10-year sequester for the rest of 2013 — 10 months — with $120 billion in spending cuts and new tax revenue, split 50-50.
Most of the revenue would come from implementing what’s known as the Buffett Rule, named after investor Warren Buffett. The rule would cap deductions and loopholes for millionaires so they pay at least 30 percent of their salary in taxes. Senate Democrats tried and failed to pass the Buffett Rule last year.
The spending cuts would come from eliminating agriculture subsidies and from trimming the defense budget, though not as drastically as the sequester would.
Specifics won’t be out until later, but this is already an egregious attempt to avoid a modest corralling of federal spending. While it is a good thing defense and agriculture subsidies would be trimmed, replacing the rest of sequestration with tax hikes is unacceptable, for two reasons:
First, tax hikes just went into place two months ago. Where is the “balance” the President wants, that that will allegedly even out his tax hikes with an attempt at solving the budget’s actual problem – overspending?
Second, sequestration never actually cut spending. It merely cut projected growth. This means Senate Democrats are planning on lowering the spending reductions by about $25 billion (sequestration will cut $85 billion from March 1 through the rest of the calendar year), thus further growing the federal budget this year.
Here’s a little piece of trivia for the next time someone says the rich don’t pay enough in taxes: the bottom 20% of earners pay 1% of their income to taxes. The top 1% pay 28.9% of their income to taxes. Taken out further, the average person in the top 20% makes 10 times as much as the bottom 20%, but paid 221 times as much in taxes. The top 1% makes 50 times as much, but pays about 1,500 times as much in taxes.
Of course, the biggest supporters of overspending find the above plan too fiscally conservative. Senator Barbara Boxer (D-CA), for example, claims “We’ve already had huge spending cuts.” A number of Senators want to replace the entire sequester with tax hikes totalling nearly $1 trillion over the next decade. Senator Boxer also says there are a number of loopholes to cut that “wouldn’t hurt anybody.” Obviously, Tea Party Patriots supports cutting loopholes to lower rates, and thus create a fairer, more efficient tax code – but let’s not pretend eliminating loopholes without lowering rates isn’t a tax increase on those who use the loophole, even if the loophole is a bad one.
One other thing on the original plan discussed above: I fail to see how mostly using the Buffett Rule for the tax hikes raises nearly enough money to replace half of the sequester, considering the Joint Committee on Taxation officially estimated the grand total value of the Buffett Rule at $47 billion over 10 years, averaging $4.7 billion annually. Tea Party Patriots has requests for comment and clarification from bothA clarification from Senate Budget Committee Chairwoman Patty Murray’s (D-WA) office and Ranking Member of the Budget Committee, Senator Jeff Sessions (R-AL).
Congress returns to their home districts next week, and so far House and Senate Republicans have held strong on implementing sequestration. Let’s make sure we call our Members of Congress and tell them to implement sequestration in full, without taking more money from the American people.