Obama’s Commission’s Plan: Huge Tax Hikes

President Obama’s bipartisan National Commission on Fiscal Responsibility and Reform last week released an early report authored by the leaders of the commission, Democrat Erskine Bowles and Republican Alan Simpson. Although the Bowles-Simpson plan was a good and welcome first step, their plan resembles ObamaCare in that it contains a non-starter for conservatives: a massive tax increase on the American people.

Under the Bowles-Simpson plan, taxes would rise substantially.  Alison Acosta Fraser of The Heritage Foundation writes that one of the flaws of the plan is that it adopts “a 50/50 approach to eliminating the deficits and lowering the projected trajectory of the debt through tax increases and spending cuts.”  According to Ryan Ellis of Americans for Tax Reform, “the report calls for a ten-year net tax hike of $961 billion, nearly a $1 trillion tax increase over the decade.”

This report may not be the report adopted by the full commission, but it shows the meat of what is expected.  The full commission is to submit its report to Congress December 1.

Gas Tax Up 15 Cents

One provision that should make many Americans’ heads spin is a proposed 15-cent increase in the federal gas tax beginning in 2013.  A high percentage of this money would be used for the federal highway fund, one of the programs loaded with special projects for friends of members of Congress.  Increasing the gas tax will hammer the transportation industry and commuters.

The Bowles-Simpson plan does have some good ideas.  “The report tackles some of the key elements of the budget—cutting discretionary spending, entitlements and other mandatory spending and reforming tax policy—and it suggests some small changes to the budgetary process.”  Fraser says.  “The co-chairs are to be commended for putting out a plan that addresses the fiscal issues confronting the nation.” Remove the tax hikes from this plan, and many conservatives would embrace this plan as an excellent first step to balancing the budget.

Bush Tax-Cuts Trap

David Axelrod, top advisor to President Obama, signaled last week to The “Huffington Post” that the President might be willing to accept a temporary extension of the 2001/2003 tax cuts, if the “middle-class” tax cuts are made permanent.  Sounds like the left has lost the messaging battle on extending the tax cuts and is resorting to Plan B.  This new plan would separate out tax cuts for job creators for two years while taking the Obama-favored “middle class tax cuts” out of the equation.  They want to kick the fight against tax cuts for job creators into 2012.

This is a trap.  Let’s hope conservatives in Congress recognize that they need to keep taxes low on all Americans during this time of high unemployment and stagnant economic growth.  John Boehner (R.-Ohio), presumptive House Speaker in the 112th Congress, said it well when he called a permanent extension of all tax cuts “the most important thing we could do to create jobs in the country.”

Sen. Jim DeMint and Earmarks

Sen. Jim DeMint (R.-S.C.) is forcing a vote within the Senate Republican Conference this week on an earmark moratorium for two years (See page 3.).   DeMint is hitting a wall of resistance, though, because Senate Republican appropriators don’t want to give up power to funnel projects home. 

Liberal Legislation on Deck

Senate Majority Leader Harry Reid (D-Nev.) has filed motions to force debates on two liberal issues this week.  The first bill is S.3815, the Promoting Natural Gas and Electric Vehicles Act of 2010. This is expected to be a $6 billion expenditure of your tax dollars to promote cars that run on electricity and natural gas. This terrible idea would funnel taxpayer money into technologies that have been proven, by the free market, to be unworthy of private investment.

Also on deck is S.3772, the Paycheck Fairness Act.  This bill has already failed once in the Senate in a September vote.  According to the Chamber of Commerce, this bill will “expand remedies under the Equal Pay Act (EPA) to include unlimited punitive and compensatory damages, significantly erode employer defenses for legitimate pay disparities, and impose invalid tools for enforcement by the Labor Department.”  This is a dream for liberal trial lawyers and big labor, who want to use the power of the federal government to extort more money from private enterprise.

Brian Darling is a senior fellow at The Heritage Foundation.