Interview With Peter Roff, Senior Fellow at Institute for Liberty
Dustin Siggins: The CBO says not doing the Obama tax increases would increase the deficit by over $3 trillion over ten years. Your response?
Peter Roff: Keeping tax rates where they are under current law is the right thing to do. Allowing them to go up, as Obama intends, will further depress an economy that’s already flat on its back. Taking more money out of the private sector- which already isn’t hiring, innovating or expanding- is a recipe for disaster.
DS: So should Republicans campaign on spending cuts to offset what CBO says?
PR: It’s a false argument for two reasons:
- It’s current law- to pay for something that is current law is absurd. Under current law, you bring in X taxes. They believe that if tax rates go up, it will bring in an additional figure: Y. So when they talk about a $3.5 trillion dollar hole, what that really means is it’s X+Y-Y, Y being the hole. They are getting X now, even in a static analysis. If you leave current law where it is, they will get X next year. They expect to spend X+Y, so they want to tax at X+Y. If they spend at X+Y, and only tax at X, there will be the hole.
DS: What is reasonable spending reform unrelated to the tax rates?
PR: Cut off the stimulus. Repeal ObamaCare, and replace it with a patient-centered, market-oriented system. Cut the federal work force across the board, including non-military Defense Department positions (i.e. cutting civilian defense employees). The American public is concerned about federal spending in ways they have never been before. But the real issue is bringing growth back to the American economy. How do you do that? You put an end to economic uncertainty. People have to know what the cost of hiring will be and what their taxes and regulatory costs will be. And THAT’S what you have to stimulate the economy. Encourage the American people to engage in economically-productive activity, rather than punish them.