Republicans discuss revenues, yet still insist on no tax hikes Update: Kyl’s office responds

posted at 2:40 pm on July 7, 2011 by Tina Korbe

The president and congressional leaders met this morning at the White House to discuss ways to reduce the deficit — and House Speaker John Boehner (R-Ohio) says there’s a 50/50 chance a debt limit deal will be reached in 48 hours — but just what the meeting accomplished is not yet clear.

Prior to the meeting, Republicans sent seemingly mixed signals about whether they would be open to “revenue increases” — a term all too often used as a euphemism for tax hikes.

Yesterday, Sen. Jon Kyl (R-Ariz.), the No. 2 GOP senator, said Republicans have agreed to between $150 billion and $200 billion in revenue increases [see updates below]. Today, Rep. Eric Cantor (R-Va.), the No. 2 GOP representative, reiterated the party’s commitment to no new taxes.

Of course, tax hikes aren’t the only way to raise revenues, and Kyl, especially, promotes the sale of government lands as an alternative to tax increases. He has also proposed increased fees for government services. Cantor has suggested a sort of tax compromise, saying Republicans would agree to close certain tax loopholes as long as those loopholes were offset by tax cuts elsewhere.

These comments make it hard for me to not be cynical about the result of the deficit reduction meetings. How much you want to bet they will net moderate cuts and the least controversial revenue raisers the Republicans can muster, but no more? Procedural reforms — those most important to ensure the country doesn’t run up against the debt ceiling issue again and again — will likely be lost in the shuffle, leaving principled conservatives in Congress with little choice other than to vote against a deal that will ultimately pass. After all, the closer we’ve gotten to the debt ceiling deadline, the less the key players seem to talk about anything other than cuts and revenues. Very few have continued to talk about the debt ceiling itself and, to my knowledge, no Democrats have yet signed on to “Cut, Cap and Balance,” nor have they proposed procedural reforms of their own. (Please somebody tell me if I’m missing something here — I’d love to find out I’m wrong on this!)

In the interest of staying positive, though, I’m going to reflect back on Sen. Ron Johnson’s comments on a conference call this morning and Rush Limbaugh’s impassioned remarks on the subject on his show today (more on that shortly). Too bad neither of them were in the meeting at the White House.

Update: The president issued a brief statement at the end of this morning’s meeting to say nothing has been agreed to and talks will continue through the weekend. Whoop-de-do.

Update: Kyl’s office responded to my story, concerned that this post makes it sound as though Kyl said Republicans agreed to tax increases (as Reuters and others wrongly tweeted). I thought I made it clear the revenue increases Kyl was referring to were land sales and government service fee increases, but just to be sure there’s no confusion about what he actually said, here are his on-the-floor remarks, posted at Breitbart TV.

Of course, I’m far more OK with the revenue increases Kyl’s talking about than I am with tax hikes, but it doesn’t change that I’m disheartened by all the discussion of revenues, in general. I’d rather Republican leadership put Obama on the defensive for not more seriously and publicly discussing procedural reforms like statutory spending caps.

Update: Yet more information from Kyl’s office. These discussions in which Republicans said they’d consider certain kinds of revenue increases — the discussions to which Kyl was referring and to which I was responding — actually occurred during the now-defunct Biden talks.

“What the GOP tentatively agreed to was as part of the failed and now-defunct Biden debt discussions – not part of any current [discussion] between Obama, Boehner and McConnell,” Kyl’s spokesman explains. “Also, the Reuters story you link to suggests that an agreement or deal has been struck. That, too, is not correct.”

In other words, when Reuters reported Republicans had agreed to revenue increases, the wire service was reporting old pseudo-news (i.e. the “news” that, during the Biden talks, GOPers tentatively agreed to certain kinds of revenue increases) and making it sound fresh. I’ve delinked this piece from the misleading Reuters report. I also changed the homepage excerpt to “Reuters takes Kyl’s comments out of context.”


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Kyl, especially, promotes the sale of government lands

Yes. I don’t know how much it would do for the deficit, but the government owns way, way too much land.

forest on July 7, 2011 at 2:42 PM

Just saw on drudge that the Kyl quote is false per breitbart

cmsinaz on July 7, 2011 at 2:43 PM

Great. Sell some government land, raise entrance fees at national parks, and we will only have about $13.9 trillion left in our debt to pay off.

Bishop on July 7, 2011 at 2:43 PM

Why does everyone keep acting like ending corporate welfare/loopholes is a tax increase?

therightwinger on July 7, 2011 at 2:43 PM

Devil in the details. By the way there are plenty of tax loopholes which should be closed. Many are an affront to market ideals and emblematic of social engineering as well as crony capitalism.

rob verdi on July 7, 2011 at 2:44 PM

Get ready for fancy words for Taxes like “Fees” or “raising Revenues”.

It’s verbal gymnastics time folks.

Read my lips. No New Raising of Revenue”.

portlandon on July 7, 2011 at 2:45 PM

Revenues increase with decrease in taxes.

Wade on July 7, 2011 at 2:45 PM

Is anyone under the delusion that if they do raise taxes (or enhance revenues, or spread the wealth around or close loopholes or make the rich pay their fair share or…)

That we won’t be in the same boat in a short while?

Chip on July 7, 2011 at 2:46 PM

A caller on Rush just made a good point. Spending cuts now and increase (tax increases) revenue in ten years.

Cindy Munford on July 7, 2011 at 2:46 PM

Why does everyone keep acting like ending corporate welfare/loopholes is a tax increase?

therightwinger on July 7, 2011 at 2:43 PM

Where do you think the money to pay the taxes will come from?

Wade on July 7, 2011 at 2:48 PM

Where’s the projections for the increased revenues from pro growth changes in government policy?

If the Dems can get away with total BS on their projections, Conservatives should have no problem selling valid economic forecasts from debt, tax and regulatory reductions, especially when itemized and explained in plain talk.

Speakup on July 7, 2011 at 2:48 PM

Get ready for fancy words for Taxes like “Fees” or “raising Revenues”.

It’s verbal gymnastics time folks.

Read my lips. No New Raising of Revenue”.

portlandon on July 7, 2011 at 2:45 PM

Don’t forget “spending in the tax code”.

Midas on July 7, 2011 at 2:48 PM

Drilling permits for the Gulf, ANWAR and California would also be helpful. Mining permits too.

rbj on July 7, 2011 at 2:49 PM

Of course, tax hikes aren’t the only way to raise revenues, and Kyl, especially, promotes the sale of government lands as an alternative to tax increases.

Kyl is saying this mainly to dispel the myth that Republicans aren’t willing to compromise on increasing government revenues. He’s saying that tax hikes are still off the table but that sale of government lands or hikes in user fees would be acceptable:

http://bigjournalism.com/dloesch/2011/07/06/reuters-fabricates-gop-compromise-on-tax-hikes/

Cantor has suggested a sort of tax compromise, saying Republicans would agree to close certain tax loopholes as long as those loopholes were offset by tax cuts elsewhere.

Before anybody gets their underwear in a bunch, Paul Ryan’s budget does exactly this — it closes tax loopholes but brings down the overall tax rates.

Boehner’s spokesmen are still telling people “Tax hikes are off the table,” even today, so I don’t think there’s a deal that includes tax increases.

Caiwyn on July 7, 2011 at 2:49 PM

BOHICA

WordsMatter on July 7, 2011 at 2:50 PM

The debt ceiling needs to be raised over $2 Trillion, Obama offers $4 Trillion in cuts over the next ten years…what debt ceiling?

Cmyst82 on July 7, 2011 at 2:50 PM

Thanks caiwyn, couldn’t get back to the linky

cmsinaz on July 7, 2011 at 2:51 PM

Unfortunately Tina, I believe you are exactly right in your analysis. No one has the will to do this right.

JDH on July 7, 2011 at 2:51 PM

Why does everyone keep acting like ending corporate welfare/loopholes is a tax increase?

therightwinger on July 7, 2011 at 2:43 PM

Um… corporations don’t pay taxes; their customers do, through increased prices, etc.

For a ‘rightwinger’, yours is a decidedly ‘leftwing’ talking point.

Midas on July 7, 2011 at 2:52 PM

So tell me, where are we now. Are we spending the money my great-grandchildren will earn or what my great-great-grandchildren will earn?

Just what will inspire them to work for a living when the gubmint steals 90% of their income to pay for the slackers who infest our society?

fogw on July 7, 2011 at 2:53 PM

Why does everyone keep acting like ending corporate welfare/loopholes is a tax increase?
therightwinger on July 7, 2011 at 2:43 PM

Because “corporate welfare/loopholes” is mostly a leftist fantasy. We shouldn’t even have a corporate profit tax to begin with. Get rid of that tax, and poof, no more “corporate welfare”. The reason that there is a special tax rate for dividends is that they are effectively double taxed. Get rid of the profit tax, and we can make dividends part of regular income.

Count to 10 on July 7, 2011 at 2:55 PM

You are right in your assumptions Tina. But what does that tell us?

It tells us how much alike both the GOP and Dem’s are. A deal will be made and as usual, the taxpayers will lose.

Time for a third party.

PatriotRider on July 7, 2011 at 2:56 PM

Well I understand what they mean by Revenue enhancements. if they are talking about selling unused US land and buildings Great why are they sitting on them anyway. But the Reps had better NOT raise Taxes on ANYONE. I am not rich but I dont hate them, I envy them, but I wont ROB them.

ColdWarrior57 on July 7, 2011 at 2:56 PM

There are only 2 sure things in life.

Death & Taxes Raising Revenues.

portlandon on July 7, 2011 at 2:57 PM

Just what will inspire them to work for a living when the gubmint steals 90% of their income to pay for the slackers who infest our society?
fogw on July 7, 2011 at 2:53 PM

Watching other people who refuse to work being carted off to a reeducation camp?

Bishop on July 7, 2011 at 2:57 PM

Get ready for fancy words for Taxes like “Fees” or “raising Revenues”.

It’s verbal gymnastics time folks.

Read my lips. No New Raising of Revenue”.

portlandon on July 7, 2011 at 2:45 PM

Two can play the word games. Lowering taxes like income tax and capital gains taxes will spur the economy and result in higher revenues. We should be therefore be selling tax cuts as ‘investments’.

slickwillie2001 on July 7, 2011 at 3:00 PM

Why does everyone keep acting like ending corporate welfare/loopholes is a tax increase?

therightwinger on July 7, 2011 at 2:43 PM

Where do you think the money to pay the taxes will come from?

Wade on July 7, 2011 at 2:48 PM

Does everyone understand that the Democrats one and only grand idea is to redistribute (the people’s) wealth?

They have a cottage industry coming up with different ways of expressing it, but it’s just the dumb warmed over idea.

We could start a list:

Ending corporate welfare/loopholes – Tax increases.

Raising Revenues – Tax increases.

Enhancing Revenues – Tax increases.

Spreading the Wealth around – Tax increases.

Make the rich pay their fair share – Tax increases.

Shared Sacrifice (notice the Democrats seem strangely absent from the sacrifice part of the equation) – Tax increases.

Chip on July 7, 2011 at 3:00 PM

Just what will inspire them to work for a living when the gubmint steals 90% of their income to pay for the slackers who infest our society?
fogw on July 7, 2011 at 2:53 PM

Watching other people who refuse to work being carted off to a reeducation camp?

Bishop on July 7, 2011 at 2:57 PM

LOL, in ‘gallows humor’ sort of way. ;)

Midas on July 7, 2011 at 3:00 PM

Why does everyone keep acting like ending corporate welfare/loopholes is a tax increase?
therightwinger on July 7, 2011 at 2:43 PM

Because “corporate welfare/loopholes” is mostly a leftist fantasy. We shouldn’t even have a corporate profit tax to begin with. Get rid of that tax, and poof, no more “corporate welfare”. The reason that there is a special tax rate for dividends is that they are effectively double taxed. Get rid of the profit tax, and we can make dividends part of regular income.

Count to 10 on July 7, 2011 at 2:55 PM

Not to mention that when you have the 2nd highest corporate tax rate in the G20, are one of only a handful of countries to tax overseas profits, you create an environment where you have to give breaks to keep companies here. One of the symptoms of that is lobbying, special breaks for friends, etc.

Just end corporate taxation, prices go down, people can get paid more, and corporations and their lobbies will stop spending billions to cajole lawmakers for special breaks. You get rid of a lot of corruption, increase the money in circulation and revive the economy in one fell swoop.

Will never happen, because our corporate tax structure is designed purely to force corporations to buy favor so the critters can get campaign money and jobs after they are voted out.

PastorJon on July 7, 2011 at 3:01 PM

Because “corporate welfare/loopholes” is mostly a leftist fantasy…

Count to 10 on July 7, 2011 at 2:55 PM

If you really want to see a panic on the left, let’s discuss a tax on Family Trusts, which the ultra-wealthy use to evade taxes. Maybe also a tax on college endowment funds.

slickwillie2001 on July 7, 2011 at 3:02 PM

Two can play the word games. Lowering taxes like income tax and capital gains taxes will spur the economy and result in higher revenues. We should be therefore be selling tax cuts as ‘investments’.

slickwillie2001 on July 7, 2011 at 3:00 PM

Ah yes, but in our case it would be the truth, and the Democratic National Socialist Progressives can’t handle the truth!

Chip on July 7, 2011 at 3:03 PM

That reminds me–one of the reasons that it appears like the rich pay a lower tax rats than the middle class is because only half of the taxes they pay on there investments actually show up on their tax bill. The rest is the corporate profit tax that is taken out before they see any of it.

Count to 10 on July 7, 2011 at 3:12 PM

I think it should be Cap, Cut and Balance, myself…

golfmann on July 7, 2011 at 3:12 PM

If the republicans in Congress don’t want to have a “tea party on your a$$”, they better NOT raise ANY taxes at all. Otherwise, the tea party will definitely primary them.

karenhasfreedom on July 7, 2011 at 3:18 PM

Two can play the word games. Lowering taxes like income tax and capital gains taxes will spur the economy and result in higher revenues. We should be therefore be selling tax cuts as ‘investments’.

slickwillie2001 on July 7, 2011 at 3:00 PM

Yep! It’s time for the government to invest in our future.

Vince on July 7, 2011 at 3:19 PM

Drilling permits for the Gulf, ANWAR and California would also be helpful. Mining permits too.

rbj on July 7, 2011 at 2:49 PM

And ROYALTY payments for all the extracted mineral wealth on public lands including coal as well as natural gas, oil and hard rock metals. Royalties for timber in wilderness areas too. Not to mention tax revenues for the profits and wages coming from all this activity. Let’s mine private sector free market enterprise! Now that’s the ticket. (No Sarc here, this is what we should have done long ago.)

KW64 on July 7, 2011 at 3:24 PM

Why do we keep falling into the trap of equating higher (effective) tax rates with higher government revenue? It has been empirically proven that, at a certain point, increasing tax rates decreases government revenue by suppressing productive economic activity.

So, if we have a revenue problem, not a perceived fairness problem, we should look at actions that will increase government revenue. Increasing the effective tax rate (e.g. by closing “loopholes”) will, at this current time, do no such thing. Get over the idea that it will. It won’t. The only way to increase government revenue is to reduce the cost of doing business in America, which means rolling back government intrusion in the form of regulations and taxes.

It’s as simple as that.

mr.blacksheep on July 7, 2011 at 3:36 PM

The RINOs are not dead. Especially in the Senate. And the House. And the Romney campaign. And the …

doufree on July 7, 2011 at 3:48 PM

It’s as simple as that.
mr.blacksheep on July 7, 2011 at 3:36 PM

Tax deductions and credits don’t affect the marginal tax rate–they just redistribute wealth.
Also, lowering marginal tax rates only increases revenues under certain conditions, and those conditions can vary over a lot of things. For instance, it is often the case that, not only do you increase tax revenue by increasing the tax revenue on the poor, but you increase their output as well, because they work just hard enough to meet set obligations. Clearly lowering a tax rate from a finite amount to nothing lowers revenue.

Count to 10 on July 7, 2011 at 3:50 PM

Taxed Enough Already

Cut expenditures. Pay the overdue bills, forget about that nifty new gizmo. Fire a few thousand unnecessary and grossly overpaid Federal employees, starting with the high-profile weasels like Eric “Who, Me?” Holder and moving rapidly to the entire Department of Education.

This ain’t rocket science.

mojo on July 7, 2011 at 4:06 PM

Hey if we’re going to sell off some government land…let’s start with California and New York! Of course both of those together would likely only net about 50 bucks…

BadMojo on July 7, 2011 at 4:07 PM

Prior to the meeting, Republicans sent seemingly mixed signals about whether they would be open to “revenue increases” — a term all too often used as a euphemism for tax hikes.

Do they really think their voting base is as stupid as your typical leftist? Do they really think their voters are nothing but a bunch of Ernestos?

MNHawk on July 7, 2011 at 4:19 PM

Here’s a tax increase this Republican can sign onto: Ending Tax Break for Union Dues Could Save $25 Billion

After all, they are so flush with cash that they can afford to indulge favorite political candidates with enormous sums of cash besides simply running the union.

slickwillie2001 on July 7, 2011 at 4:45 PM

We need to call our representatives and tell them we will not accept an increase in the deby celing. Given current debt levels we want a reduction in the debt ceiling.

paulsur on July 7, 2011 at 5:28 PM

“Go ahead, tin-horn, skin that smoke-wagon. See what happens.”
– Tombstone

mojo on July 7, 2011 at 5:29 PM

Here’s a map showing federally owned land as a percentage by state. Notice the difference between east and west. Seems this would generate a lot of revenue besides the sale price. Click on the map for a larger view.

http://bigthink.com/ideas/21343

chewydog on July 7, 2011 at 5:34 PM

I would like to see an analysis of the loopholes GE used to avoid paying any taxes. Would Obama like to close those?

GaltBlvnAtty on July 7, 2011 at 5:40 PM

Zero is still secretly funneling dough to a new version of ACORN and out of the other side of his mouth is telling us we have to share some sacrifice. We’ll be lucky to have gruel to share over the next year & a half.

Kissmygrits on July 7, 2011 at 5:54 PM

Why does everyone keep acting like ending corporate welfare/loopholes is a tax increase?

therightwinger

Because it effectively is. If you have to pay $50 in taxes that you didn’t have to pay before because of “loopholes”, your taxes have increased, even though the rate may still be the same.

xblade on July 7, 2011 at 9:35 PM