Yesterday House Majority Leader Eric Cantor (R-VA) and Sen. Jon Kyl (R-AZ) may well have doomed negotiations to raise the nation’s debt limit when they walked out over a dispute with Democrats about raising revenues. Their theatrics bring the country closer to the brink of financial collapse, and observers have described the move as a “tamper tantrum” and “political grandstanding.” Today, more details emerged about exactly what Republicans are willing to threaten the global economy over to defend.

Rep. Chris Van Hollen (D-MD), a member of the bipartisan debt discussion group led by Vice President Joe Biden, said Republicans chose to “protect taxpayer subsidies for big oil companies, tax breaks for corporate jets, and tax breaks for millionaires”:

Democrats want to close tax loopholes that benefit oil companies, and eliminate a tax preference that gives corporate aircraft a friendlier depreciation schedule than commercial aircraft. Additionally, Van Hollen said, Democrats were proposing to phase out tax deductions and certain credits for people making more than $500,000 a year. These would be paired with a reduction in the tax burden on lower earners, by eliminating existing limitations on their deductions. [...]

“The message Republicans sent was…unless we accept their lopsided approach…they’re prepared to tank the economy,” Van Hollen said.

Cantor had been vague about the specifics, saying only that the disagreement had been a “tax issue.” His spokesman, Brad Dayspring, described the impasse as being over “Democrats’ push to raise taxes” on “individuals, small businesses, and employers,” which TPM notes is the language Republicans often use to make their position sound more palatable than “defending tax breaks for millionaires.”

Democratic aides also said Republicans’ refusal to consider defense spending cuts to alleviate painful cuts to domestic programs was “central” to the negotiation breakdown. As Democrats have repeatedly emphasized, it’s impossible to improve the country’s debt situation without raising revenues or by slashing discretionary spending alone.

There’s also evidence that Republicans planned the walk-out weeks in advance to pressure Democrats and improve Speaker John Boehner’s (R-OH) negotiating position. In short, at no point have Republicans been negotiating in good faith or honestly trying to broker a deal. They’re more interested in “striking a Tea Party pose” and using the massive debt they created as an excuse to enact their radical political agenda.

Yesterday, House Majority Leader Eric Cantor (R-VA) walked out of deficit reduction negotiations being led by Vice President Joe Biden, on the justification that Democrats were insisting on some sort of new revenue being part of the deal, while Republicans have ruled taxes “off the table.” “There is not support in the House for a tax increase, and I don’t believe now is the time to raise taxes in light of our current economic situation,” Cantor said in a statement.

Cantor’s sentiment was echoed by Speaker of the House John Boehner (R-OH), who said, “raising taxes is going to destroy jobs. If you raise taxes on the people that we need to grow our economy and to hire new workers, guess what: they’re not going to do it if they have to pay higher taxes to the federal government.” But the GOP needs to check the history of one of its icons to see if this is really the case.

After all, in 1982, the Reagan administration implemented the first of several tax increases that it would endorse in order to reduce the deficit. (Reagan raised taxes in seven of the eight years that he was President.) Republican lawmakers and conservative economists screamed that the tax increase would slam the economy and hinder growth. But as former Reagan and George H.W. Bush economic official Bruce Bartlett noted, “It would be hard to find an economic forecast that was more wrong in every respect“:

Looking at real gross domestic product, it grew 4.5 percent in 1983 and 7.2 percent in 1984 – an exceptionally strong performance. The stock market had one of its best years ever in 1983 – both the Dow Jones Industrial Average and the S&P 500 Index rose 35 percent. There was no increase in the rate of inflation, which was exactly the same in 1983 and 1984 as it was in 1982. The unemployment rate fell from 10.6 percent in December 1982 to 8.1 percent by December 1983 and 7.1 percent in December 1984.

The 1982 tax increase is the largest peacetime tax increase in U.S. history. And the same thing happened around President Bill Clinton’s 1993 tax increase: dire warnings from Republicans about economic Armageddon, followed by a booming economy.

As Center for American Progress Director of Tax and Budget Policy Michael Linden noted, over the last 50 years, lower top tax rates have coincided with weaker growth, while the strongest growth was during periods when the top tax rate was substantially higher than it is now. As he explained, “These numbers do not mean that higher rates necessarily lead to higher growth. But the central tenet of modern conservative economics is that a lower top marginal tax rate will result in more growth, and these numbers do show conclusively that history has not been kind to that theory.”

Of course, it’s not really surprising that the GOP has no idea what went on during Reagan’s term. After all, House Republicans scoffed and rolled their eyes when presented with the fact that taxes were higher under Reagan than they are under Obama.

Gov. Rick Perry (R-TX) — who, depending on the hour, is considering a run for the 2012 GOP presidential nomination — likes to point to the Texas economy as an indicator of his success. As we’ve noted several times, Perry’s tale is mostly fantasy, but that hasn’t stopped him from repeating it.

At the moment, one of Perry’s favorite claims is that the Texas budget was balanced for the 2012-2013 budget cycle without tax increases and while preserving $6 billion in the state’s Rainy Day Fund. “We’ve passed a budget that cuts spending in Texas while maintaining essential services, keeping taxes low and preserving more than $6 billion in emergency funding,” Perry said in a speech a few weeks ago. In a speech last week, he reiterated the claim, saying, “I might add that new budget leaves $6 billion in a Rainy Day Fund.” The New Republic noted that Perry has “turned ‘preserving the rainy day fund’ into an applause line.”

But has the fund been preserved? Members of Perry’s own party in Texas are telling a different story, as the Texas Tribune reported:

“We’ve got to get the message right. There’s been a lot of misinformation out there that there’s $6 billion in the fund that’s not been used. It’s been used,” said Rep. Charles Perry, R-Lubbock and no relation to the governor. [...]

Lawmakers have already drawn down $3.1 billion of the fund’s roughly $9.5 billion reserve to cover a deficit in the current budget. Then, to make the 2012-2013 budget balance, the state’s projected share of expected Medicaid costs is underfunded by $4.8 billion — for many, a conservative estimate.

That means when lawmakers come back in two years — and without a change in federal law diminishing the state’s obligation to Medicaid or an increase in Rainy Day revenue from an improved economy — they will need most of the remaining $6 billion to pay another past due bill.

“Effectively they’ve used it,” said Bill Hammond, president of the Texas Association of Business and a former state lawmaker. “They just aren’t going to fess up until January of 2013.” “They have used the entirety, depending on how Medicaid finally shakes out,” Hammond added.

So it seems that Perry’s claim regarding the Rainy Day Fund is little more than a budget gimmick. Of course, it’s nothing new for Perry to make bogus claims about the Texas budget. For months, he poo-pooed the idea that Texas’ 2012-2013 budget deficit would be any bigger than $11 billion. In actuality, the deficit was $27 billion.

At a town hall meeting last weekend, constituents slammed Rep. Robert Dold (R-IL) for supporting the radical House Republican budget — particularly its failure to eliminate the costly tax breaks for oil companies that the government doles out every year. Dold attempted to sooth their grievances by arguing that his support for the oil subsidies is directly related to job growth:

If you’re talking about the subsidy that is generally referred to as the ‘manufacturing subsidy’ – all American manufacturers – every single one out there – actually gets a three percent [tax] reduction in their income for making American products. The oil companies that you’re referring to are part of it. That’s usually the big subsidy that people are talking about, and so the question then becomes, do we want to take that away from American manufacturers?

Watch it (Question starts 15 seconds in):

Dold is correct that oil companies are included in the manufacturing deduction, a move they lobbied heavily for back in 2004. But this is by no means their only source of corporate welfare — there are many other loopholes oil companies have enjoyed for nearly a century.

For one, multinational oil companies also get the privilege of being “dual capacity taxpayers,” which means they can write off the bulk of their domestic tax bill because they already paid their “taxes” to the host country (even though many countries impose low or no business tax – meaning the “taxes” are really just required royalties paid for extracting natural resources). They are also able to “expense” certain drilling costs and write off the costs of searching for oil, even though those actions enable them to boost their profits. All told, the U.S. gives tax benefits to the tune of $4 billion every year to Big Oil.

And as it turns out, contrary to Dold’s pronouncement, these tax credits create very few jobs. Spending on wind, solar, and other forms of alternative energy, meanwhile, has proven to be a much better return on investment, with job creation two and a half to four times larger than that for oil and natural gas.

– Jen Kalaidis