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GOP gets it wrong on tax increases

America has both a spending problem and a revenue problem — too much of the former and too little of the latter. Every serious student of the federal budget, right, left and center, agrees that any realistic solution requires a combination of spending cuts and revenue increases. 

Democrats and Republicans on the Simpson-Bowles Commission knew that both revenue increases and spending cuts were necessary to deal effectively with our deficit problem. 

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N. Gregory Mankiw, the chairman of George Bush’s Council of Economic Advisers, knows both tax increases and spending cuts are required. Indeed, Mankiw argues, “The distinction between spending and taxation is often murky and sometimes meaningless.” Explaining that giving snipe hunters a tax break for every fake animal they hunt down is no different from setting up a program to pay snipe hunters for each pelt they bring in, Mankiw implicitly criticizes Republicans’ unwillingness to end oil-company subsidies and explicitly advocates broadening the tax base and reducing rates to increase revenue.

President Reagan’s budget director, David Stockman, knows raising revenue must be an essential component of any fiscal cure. “It is simply unrealistic to say that raising revenue isn’t part of the solution. It’s a measure of how far off the deep end Republicans have gone with this religious catechism about taxes,” says Stockman, one of the biggest budget cutters of all time. 

Conservative stalwarts like Sens. Saxby Chambliss (R-Ga.), Mike Crapo (R-Idaho) and, most famously, Tom Coburn (R-Okla.) all recognized the need to raise revenue in order to balance the budget.

Voters also know reducing the deficit requires a balanced approach that both raises revenue and cuts spending. A recent Ipsos poll for Reuters found 61 percent of Americans preferring to reduce the deficit by raising taxes and cutting spending or by just raising taxes. Only 27 percent want to balance the budget through spending cuts alone. (A balky 10 percent wanted to do neither.) Republicans failed to muster a majority of their own partisans for reducing the deficit by cutting alone, with 46 percent of GOPers opting for that course. Swing independents looked like the nation as a whole.

A recent ABC/Washington Post poll buttressed the Ipsos findings, with a similar 59 percent opting for a combination of increased taxes and spending cuts to reduce the deficit. Just a third wanted to achieve that objective through spending cuts alone.

Americans not only support tax increases to reduce the deficit in general, but voters express support for several specific tax hikes as well. Nearly three-quarters (72 percent) favor “raising taxes on Americans with incomes over $250,000 a year.” Gallup found 59 percent saying next year’s federal budget “should … include higher taxes for families with household incomes of $250,000 and above.” Support for ending tax subsidies to oil companies is far greater. 

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So everybody from distinguished Republican economists to leading economic lights of the Reagan and Bush administrations to Republican senators and the business community, not to mention the American people, all understand we have both a spending and a revenue problem that must be addressed simultaneously if we are to restore sanity to our fiscal house.

Everybody understands this except House Republicans, who sanctimoniously and inaccurately claim to speak in the name of the American people, rejecting any revenue increase of any kind.

Their uncompromising extremism makes a mockery of the very word compromise. Their version: “Give us everything we want — and don’t even talk about your views and vision — or we will get up from the table and burn down the nation’s economic house.”

Such irresponsible behavior is sadly reinforced by political calculation. Republicans reason that if the nation’s economy goes down in the flames of default, the Democratic president will suffer most. 

They might be right, but that is no way to help run a country.

Mellman is president of The Mellman Group and has worked for Democratic candidates and causes since 1982. Current clients include the Majority Leader of the Senate and the Democratic Whip in the House.