Tom Coburn of Oklahoma, Mike Crapo of Idaho, and Saxby Chambliss of Georgia are proposing an automatic tax increase with spending cuts if deficit reductions do not materialize. This is government without either brains or balls. Unable to reach any effective compromise we can just ‘automatically’ increase taxes without any Congressman having to take responsibility.
The dynamic of tax increases may actually reduce revenues depending on who is taxed. This reduced revenues may trigger more tax increases. This is not unlike the feedback loop in finance where margin calls cause sales which reduce prices which trigger further margin calls.
Such tactics concede judgment and decision to stupid games. I could support such a move, however, if….. the tax increase is a flat percentage increase amount APPLIED TO EVERY TAXPAYER. To thrust this burden on a single group (the “rich”- whoever they are) would be totally unacceptable. Allowing a single small unpopular minority to bear the brunt of political incompetence will only encourage more incompetence.
Secondly such a move must require the following expense cuts.
- Cutting of retirement benefits for all Congressmen in half
- A 25% reduction in the salaries for all Congressmen and their staffs.
- A 10% across the board pay cut for all non military government employees.
Trust me- with just these three small cost reductions we will have a balanced budget in record time.