For months, Republicans have been claiming that tax increases — even for the very wealthiest Americans — should absolutely not be a part of any plan to get the country’s long-term deficit under control. Some Republican members of President Obama’s deficit commission have even flatly ruled out any tax increases.
It would take draconian cuts to highly popular programs to balance the budget entirely on the spending side. And last night, on Bloomberg News, Sen. Orrin Hatch (R-UT) conceded that taxes likely need to be part of the equation:
Q: Let me ask you though, I certainly hate paying higher taxes. Most people do, I’m sure corporations do as well, but how do we get out of this mess of the last couple of years — and I look at the federal deficit — how do we get out of it without doing some kind of taxation?
HATCH: Well, we may not be able to.
But Hatch was quick to rule out two of the Obama administration’s proposals regarding where to responsibly raise taxes: allowing the Bush tax cuts for the richest two percent to expire on schedule (as Republicans designed them) and cutting taxpayer subsidies to oil and gas companies.
Hatch relied on two patently false arguments to make his case for protecting the rich and Big Oil from paying their fair share in taxes. First, he claimed that letting the Bush tax cuts for the wealthy expire would disproportionately affect small businesses, cherry-picking his data in the same way that Sen. Jon Kyl (R-AZ) does. The fact remains that just three percent of people with any business income whatsoever would be affected if these tax cuts disappear.
Second, Hatch claimed that cutting oil subsidies would inevitably drive up oil and gas prices for everyone in the country. However, the Office of Economic Policy at the Department of Treasury has found that removing subsidies for the oil industry would affect domestic production by less than one-half of one percent.
Of course, this whole episode begs the question: if Hatch won’t raise taxes on the rich or Big Oil, but concedes that taxes may need to go up to reduce the deficit, who is he willing to tax? The middle class?
Hatch was also asked what, specifically, he would cut in the budget, since even with revenue increases some spending is going to have to be reduced. Hatch was unable to name a single specific program, instead resorting to vague hand-waving about a spending freeze (which, as economist Mark Thoma notes, if implemented strictly would mean cutting programs like Food Stamps).