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The amount of money the federal government takes out of the U.S. economy in taxes will increase by more than 30 percent between 2012 and 2014, according to the Budget and Economic Outlook published today by the CBO.
At the same time, according to CBO, the economy will remain sluggish, partly because of higher taxes.
“In particular, between 2012 and 2014, revenues in CBO’s baseline shoot up by more than 30 percent,” said CBO, “mostly because of the recent or scheduled expirations of tax provisions, such as those that lower income tax rates and limit the reach of the alternative minimum tax (AMT), and the imposition of new taxes, fees, and penalties that are scheduled to go into effect.”
The U.S. economy, CBO projects, will perform “below its potential” for another six years and unemployment will remain above 7 percent for another three.
If elected president, Mitt Romney might consider ending a tax break that helped the former Massachusetts governor accumulate his fortune, an aide suggested Tuesday. The comments came as the Romney campaign made available more than 500 pages of tax-return data for 2010 and 2011 amid signs the issue was hurting him with some voters.
The difference between Newt Gingrich and Mitt Romney can be summed up in a pivotal moment at the Republican debate on Monday night. When Newt Gingrich told Mitt Romney that investment income would not be subject to tax under his tax plan, Mitt Romney did not express the joy that one might expect given most of his income is derived from investments. Rather, Mitt displayed shock and disdain.
Newt calmly explained that according to Alan Greenspan, the best way to maximize economic growth is not to tax investment. By not taxing investment, Newt would create an environment for maximum job growth and restore America’s economic vitality. While Mitt Romney believes his management skill will help restore economic prosperity, Newt Gingrich wants the American people to create their own prosperity.
If Congressional Republicans want to know why people call politics the “second oldest profession” and view politicians with similar regard to used car salesmen, they need only look at the new mantra of Republican super committee members: “We will not raise your taxes as much as the other guys.” Congressional Republicans, who railed against President Obama for raising a trillion dollars of new taxes in the Obamacare legislation and professed that raising taxes in the middle of a recession is the surest way to prolong it, have pledged to raise half a trillion dollars in new taxes as their opening gambit in the super committee negotiations.
Congressional Republicans who refused to be sucked into the Marxist rhetoric of President Obama and the “Occupy Wall Street” crowd by voting down tax increases on millionaires and billionaires, have proposed raising taxes on families and small businesses making a fraction of that amount. Congressional Republicans who reminded us that we have a “spending problem” and not a “revenue problem” have thrown their lot in with Congressional Democrats. These Democrats mocked Republican Presidential candidates for refusing to accept a 10:1 ratio of spending cuts to tax increases while being unwilling to accept the recommendation of the President’s blue ribbon commission when it proposed a 4:1 ratio of tax cuts to spending increases. While this is terrible economic policy, the political implications for Congressional Republicans and the Republican Presidential candidate are even worse.
