The Super committee chance of getting Democrats and Republicans to go along with bipartisanship actual admitted failure aided Washington, President Obama, Congress and the tax payer from further disaster. The plan was simply tough but manageable. Credit would be given to the 12 chosen Congressional few. The plan was a false path to lower and raising taxes and cut entitlements with an end of year budget looming this December. The real deal was to balance the budget for the next ten years, jumpstart the economy with economic growth. Because of this, between now and the 2012 election, America will not prosper under President Barack Obama’s administration. Let me explain further.
One reason the entire country is off course right noweconomic growth in generating tax revenue cannot be inflated. Under President Clinton, tax revenue growth increased from 1997 to 2000 and again with Bush’s administration from 2004 thru 2007, when revenues went up by nearly 50% in each instance. Tax rates were not raised during that time the increase in revenue occurred because America had strong economic growth. The economy was flourishing.
To achieve prosperity a change in a tax structure would be the taxation of capital gains from ordinary middle class American incomes. Neither capital gains nor any of the income from capital should be taxed at all. Eliminating capital income taxation would increase the U.S. capital stock. Taxation of capital gains is often the supply side of which provides a better society for economic expansion.
To achieve economic growth, both Democrats and Republicans have stronggrowth oriented thinkers. This led to the formation of the “Supercommittee.” The twelve Congressmen who were selected to reducing our government’s enormous national deficit and wasteful spending, the goal, compete for better plans for economic growth lower competing income tax rate reduction as the 1980s experienced.
The committee tried to come to an agreement on reducing our government’s enormous deficit. Of all options they considered they couldn’t agree on what was best. So instead they made the decision to trigger automatic cuts across the board. The committee couldn’t agree on raising taxes. They couldn’t agree that it would generate the necessary revenues needed to offset deficits. They couldn’t agree that the taxpayers would accept these higher taxes. They weren’t sure that a wealth tax would have the intent of raising more revenue. Bill Clinton did during the 1990s and the entire nation prospered from it.
That led to the advancement in technology and started the dotcom era of high growth new tools of advanced knowledge of high tech machinery which brought on hundreds of billions in revenue for the private sector and led to deficit reduction which carried the economy. Clinton knew what he was doing during that timeline. Then the dotcom failed. Now it is back and it could produce the same effects in the communication industry. With this in mind, I guess is that the “Supercommittee” couldn’t reach some sort of tax agreement for tax purposes.
They couldn’t agree that the effect of raising taxes wouldn’t be counter-productive to the Gross Domestic Product, creating a barrier to growth and thereby reducing overall revenues to the government. All of the governments programs will face cuts in their budgets. According to reports no government department will be spared, with the exception of Social Security, Medicaid and Veterans benefits which are exempt by law. The spending cuts will go into effect beginning in 2013.
The real problem both Washington and the government has a spending problem, not a revenue problem. Democrats advocate raising tax rates on the rich to address the deficit; Republicans believe that such increases could collapse the economy. The middle class that drives the economy holds that flatter federal taxes, with lower rates but fewer deductions, could yield more revenue and spark economic growth.
If President Obama expire the Bush tax cuts as promised as part of his “Change” campaign, a new tax rate could help deficit reduction spark revenue and economic growth with the help of a wealth tax. The same wealth tax Clinton had in the 1990s.But Democrats didn’t bite. They have been content to watch all fall apart, as long as they can complain that Republicans should have agreed to raise not just taxes on the rich but also their tax rates. The democrats controlled congress for Obama’s first two years of his term. Obama’s administration has not produced a balanced budget in more than 1000 days since the president took office. Was the committee’s failure bound to be necessary?
It is disappointing that the supercommittee was unable to achieve pro-growth tax reform and meaningful spending cuts. By avoiding doing the responsible thing now, Congress could embracedevastating consequences later.The supercommittee’s failure appears to have a hidden agenda from the Democrats. If President Obama is reelected in 2012, his administration could reform the entire tax, budget and revenue structure until after the 2012 elections.This failure perhaps is a bad deal now which makes it a worst deal later. Now the question is, It appears as everything in Washington is hitting road blocks. Will the budget be balanced before the end of the year?
The opinion expressed in this commentary
Article are solely those of Michael Coker