According to a recent editorial by The Wall Street Journal: “Washington has repeated nearly every economic policy mistake of the 1930s in recent years, so why not repeat one of the bigger blunders of the 1960s too?”
“We refer to President Obama’s proposal,” it continued, “for a new ‘Buffett Rule’ to raise taxes on Americans earning more than $1 million a year.”
It reminds me of something Will Rogers used to say. When you find yourself in a hole, stop digging. President Obama dug in with the $1 trillion stimulus, dug further with his financial regulatory bill, and dug even deeper with ObamaCare. Americans don’t need to study the economic data — as clear as the data is — to know that these old-fashioned tax-and-spend policies have only made things worse. More importantly, we could have simply opened a history book to know they wouldn’t have worked in the first place.
Yet, here we are again, confronting another warmed-over policy that history tells us will hurt working Americans, job creation, and our economy — and, ironically, likely won’t even increase federal revenue.
Named after the international billionaire Warren Buffet, who has repeatedly called for higher taxes (but hasn’t voluntarily offered to pay more to the U.S. Treasury), the so-called “Buffet Rule” is eerily reminiscent of one of our country’s most infamous policy failures.
In 1969, Treasury Secretary Joseph Barr testified before Congress that 155 high-income Americans were not paying enough in taxes. In response, a tax similar to the “Buffett Rule” was quickly pushed through Congress in order to punish the ultra-wealthy.
That tax, known today as the Alternative Minimum Tax (AMT), ended up hitting more than just a few dozen fat cats — it will affect 30 million households next year (a figure that continues to grow substantially every year). As a result, Congress must now vote annually to provide relief from the AMT in order to spare the millions of middle-income Americans who would otherwise see their taxes unexpectedly skyrocket.
As the saying goes, for every complex problem, there is a solution that is simple, clear — and wrong; and so it is with these types of quick-fix tax hikes. When politicians take aim at the wealthy, they usually end up hitting average American families — just like what happened with the AMT.
There is broad consensus that this massive tax is not going to do anything to move our economy forward. In fact, most economists tell us it will do just the opposite, driving our economy further into decline and almost certainly causing more Americans to lose their jobs. Moreover, it was the president himself who said that the “last thing you want to do is raise taxes in the middle of a recession.”
If we’re going to get the economy moving again, we have to stop turning to the failed policies of the past. Dredging up a 40-year-old anti-growth tax idea is certainly not going to move our country forward today.
In any event, if the goal is to increase the flow of revenue to the Treasury, the best way to raise revenues is to grow the economy and put people back to work.
I believe it’s time to take the focus off of punishing Americans through class-warfare redistributionist taxation and instead focus on helping the millions of ordinary families who simply want a better economy and a stronger job market; common-sense policies, not punitive taxes, is what will get us there.
Sen. Jon Kyl is the Senate Republican Whip and serves on the Senate Finance and Judiciary committees. Visit his Web site at www.kyl.senate.gov or his YouTube channel at www.youtube.com/senjonkyl.