Congressman Frank Wolf Supports $2 Trillion Tax Increase
On Wednesday night, Congressman Frank Wolf (R-Va.) voted for a budget which calls for nearly $2 trillion in tax increases and contains phony and fraudulent spending cuts. As one of only 38 Congressmen in the 435-member U.S. House of Representatives to do so, Congressman Wolf should answer to his constituents as to why he supports this budget.
The vote rejecting this budget was 382-38, one of the lowest support levels for a budget on record.
The budget in question was offered by Congressman Jim Cooper (D-Tenn.) and Steve LaTourette (R-Ohio). It seeks to mirror the recommendations of President Obama’s Debt Commission, often known as “Simpson-Bowles” for the co-chairs of that commission appointed by President Obama.
The budget has the following elements:
$2 trillion in Higher Taxes:
--The budget calls for raising income taxes by sharply curtailing income tax deductions and credits. It would greatly limit such common, everyday tax breaks as the mortgage interest deduction, charitable deduction, and tax-free health insurance from work. The budget seeks to raise $1.2 trillion over the next decade from these tax hikes, even after a reduction in tax rates
--In addition, the budget calls for tax brackets and other tax provisions which increase with inflation to grow at a slower rate. This is a tax increase on every American who pays taxes. This would raise taxes by $89 billion over the next decade
--The budget also calls for more income to be subject to Social Security payroll taxes. More and more wages and self-employment income would have to pay taxes into the now-bankrupt Social Security system. Roughly speaking, the amount of wages and self-employment income subject to the 12.4% Social Security tax would grow from about $100,000 today to about $150,000 under this budget. This is estimated to raise taxes by $77 billion over ten years
--The tax increase budget also calls for workers to have to pay taxes on employer-provided health insurance. If the value of this tax benefit grows at more than about 6% a year (and it’s been growing faster than that for decades), workers will have to start paying taxes on the insurance they receive at work. It’s unknown how much this will raise taxes
--Finally, the budget claims savings from lower interest payments on the national debt. $205 billion is due to tax hikes in the budget, so these savings should be linked to the tax hikes
*All together, the budget voted on last night was a ten-year tax hike of nearly $2 trillion*
In addition to the $2 trillion in tax hikes in this budget, it is also filled with fraudulent “spending cut” gimmicks:
--The LaTourette-Cooper budget double counts spending cuts that have already happened. $500 billion of their supposed savings comes from the cuts already set in law by the August 2011 debt limit deal.
--The budget dishonestly claims to net $650 billion in cuts from new discretionary caps. However, the plan does not include the $424 billion in supplemental war spending the authors also call for in their budget.
--Taken together, the budget plan includes almost $1 trillion in phony spending cuts. This fraudulent accounting means the purported savings from discretionary spending cuts amounts to only $200 billion. Even giving the authors credit for all the claimed mandatory spending cuts, their fake discretionary cuts means the bill – at best – offers one dollar in spending cuts for every one dollar in tax hikes.