July 18, 2011 The Honorable John Boehner The
July 18, 2011 The Honorable John Boehner United States House of Representatives Washington, DC 20510
The Honorable Mitch McConnell United States Senate Washington, DC 20510
Dear Speaker Boehner and Leader McConnell: Our organizations represent millions of tea party and limited government activists and scholars from around America. We are all united in one opinion about the on-going debt limit negotiations—tax increases need to be “off the table,” since Washington, D.C. has an over-spending problem, not an undertaxing problem. Washington, D.C. already spends too much of our money. The historical level of federal government spending has been 21 percent of economic output. According to the non-partisan Congressional Budget Office (CBO), federal spending will be 23-24 percent of economic output each year for the rest of this decade, and then balloon to over 30 percent in the next few decades. Higher taxes to fuel President Obama’s super-sized welfare state will only make this problem worse. America has a fiscal crisis because Washington spends too much, not because it taxes too little. According to CBO, tax revenues will reach or exceed the historical average of 18 percent of economic output by the end of this decade, even as spending continues to careen out of control. Raising taxes would kill jobs, wreck any hope of an economic recovery, and simply serve to enable an out of control spending elite in Washington, D.C. Grand compromises to cut spending and hike taxes have failed in the past. In 1982, President Reagan was promised $3 in spending cuts for every $1 in tax hikes. The tax increases happened, but President Reagan was still waiting for the promised spending cuts when he left office. In 1990, President George H.W. Bush was promised $2 in spending cuts for every $1 in tax hikes. He broke his “Read My Lips” tax pledge at Andrews Air Force Base, but CBO numbers prove that not a single penny of the promised spending reductions were realized. Putting tax increases on the table now will only result in real tax hikes on American employers and families, and phony spending cut promises that never get realized. The focus must be on spending, and spending alone. Agreements that focus on the deficit, rather than overspending, serve as poor substitutes for true fiscal reform. The President’s suggestion for a deficit “trigger” would serve as nothing more than a fig leaf for more spending and higher taxes. First suggested in 1985, Congress implemented deficit targets that, paradoxically, produced record deficits. By focusing on the product of overspending, rather than the spending itself, the deficit “triggers” have led to higher taxes and never produced a balanced budget.
The proper venue to examine the tax code is in the context of revenueneutral tax reform, not a spending cut negotiation. There are $1.2 trillion in tax deductions and credits, according to the Office of Management and Budget. Many of these could be traded in for lower marginal tax rates, which would in turn boost productivity and create jobs. But this trade must be revenue-neutral, must be done in a tax reform negotiation, and simply is not appropriate in these debt limit talks. It seems clear that the opportunity for revenue-neutral tax reform is no longer possible in this negotiation— which should now be entirely focused on spending. Tax increases are not needed to fix Washington, D.C.’s over-spending problem—in fact, higher taxes would only make that problem worse, since politicians will simply spend the new money. In order to get the budget under control, spending must be cut. Any tax hikes are unacceptable to the broad center-right movement. Sincerely, 60 Plus Association, Jim Martin, Chairman American Family Business Institute, Dick Patten, President Americans for Prosperity, Tim Phillips, President Americans for Tax Reform, Grover Norquist, President The Carleson Center for Public Policy, Susan Carleson, Chairman CatholicVote.org, Brian Burch, President Center for Fiscal Accountability, Mattie Corrao, Executive Director Center for Individual Freedom, Timothy Lee, Vice President of Legal Affairs Citizen Outreach, Chuck Muth, President Citizens for Limited Taxation, Chip Faulkner, Associate Director ClearWord Communications Group, Rick Hendrix, Founding Partner Conservative HQ, Richard Viguerie, Chairman Faith and Freedom Coalition, Gary Marx, Executive Director Florida Center-Right Coalition, Rick Watson, Chairman GOProud, Jimmy LaSalvia, Executive Director Hispanic Leadership Fund, Mario Lopez, President Independent Women’s Forum, Nicole Neily, Executive Director Institute for Policy Innovation, Tom Giovanetti, President League of American Voters, Bob Adams, Executive Director Let Freedom Ring, Colin Hanna, President Less Government, Seton Motley, President The National Center for Public Policy Research, Amy Ridenour, President National Taxpayers Union, Duane Parde, President Republican Pac, William Shaker, President RightMarch.com, Dr. William Greene, President Small Business & Entrepreneurship Council, Karen Kerrigan, President Smart Business Hawaii, Sam Slom, President Taxpayer’s Protection Alliance, David Williams, President Tea Party WDC, Lisa Miller, Organizer
The Honorable Mitch McConnell United States Senate Washington, DC 20510
Dear Speaker Boehner and Leader McConnell: Our organizations represent millions of tea party and limited government activists and scholars from around America. We are all united in one opinion about the on-going debt limit negotiations—tax increases need to be “off the table,” since Washington, D.C. has an over-spending problem, not an undertaxing problem. Washington, D.C. already spends too much of our money. The historical level of federal government spending has been 21 percent of economic output. According to the non-partisan Congressional Budget Office (CBO), federal spending will be 23-24 percent of economic output each year for the rest of this decade, and then balloon to over 30 percent in the next few decades. Higher taxes to fuel President Obama’s super-sized welfare state will only make this problem worse. America has a fiscal crisis because Washington spends too much, not because it taxes too little. According to CBO, tax revenues will reach or exceed the historical average of 18 percent of economic output by the end of this decade, even as spending continues to careen out of control. Raising taxes would kill jobs, wreck any hope of an economic recovery, and simply serve to enable an out of control spending elite in Washington, D.C. Grand compromises to cut spending and hike taxes have failed in the past. In 1982, President Reagan was promised $3 in spending cuts for every $1 in tax hikes. The tax increases happened, but President Reagan was still waiting for the promised spending cuts when he left office. In 1990, President George H.W. Bush was promised $2 in spending cuts for every $1 in tax hikes. He broke his “Read My Lips” tax pledge at Andrews Air Force Base, but CBO numbers prove that not a single penny of the promised spending reductions were realized. Putting tax increases on the table now will only result in real tax hikes on American employers and families, and phony spending cut promises that never get realized. The focus must be on spending, and spending alone. Agreements that focus on the deficit, rather than overspending, serve as poor substitutes for true fiscal reform. The President’s suggestion for a deficit “trigger” would serve as nothing more than a fig leaf for more spending and higher taxes. First suggested in 1985, Congress implemented deficit targets that, paradoxically, produced record deficits. By focusing on the product of overspending, rather than the spending itself, the deficit “triggers” have led to higher taxes and never produced a balanced budget.
The proper venue to examine the tax code is in the context of revenueneutral tax reform, not a spending cut negotiation. There are $1.2 trillion in tax deductions and credits, according to the Office of Management and Budget. Many of these could be traded in for lower marginal tax rates, which would in turn boost productivity and create jobs. But this trade must be revenue-neutral, must be done in a tax reform negotiation, and simply is not appropriate in these debt limit talks. It seems clear that the opportunity for revenue-neutral tax reform is no longer possible in this negotiation— which should now be entirely focused on spending. Tax increases are not needed to fix Washington, D.C.’s over-spending problem—in fact, higher taxes would only make that problem worse, since politicians will simply spend the new money. In order to get the budget under control, spending must be cut. Any tax hikes are unacceptable to the broad center-right movement. Sincerely, 60 Plus Association, Jim Martin, Chairman American Family Business Institute, Dick Patten, President Americans for Prosperity, Tim Phillips, President Americans for Tax Reform, Grover Norquist, President The Carleson Center for Public Policy, Susan Carleson, Chairman CatholicVote.org, Brian Burch, President Center for Fiscal Accountability, Mattie Corrao, Executive Director Center for Individual Freedom, Timothy Lee, Vice President of Legal Affairs Citizen Outreach, Chuck Muth, President Citizens for Limited Taxation, Chip Faulkner, Associate Director ClearWord Communications Group, Rick Hendrix, Founding Partner Conservative HQ, Richard Viguerie, Chairman Faith and Freedom Coalition, Gary Marx, Executive Director Florida Center-Right Coalition, Rick Watson, Chairman GOProud, Jimmy LaSalvia, Executive Director Hispanic Leadership Fund, Mario Lopez, President Independent Women’s Forum, Nicole Neily, Executive Director Institute for Policy Innovation, Tom Giovanetti, President League of American Voters, Bob Adams, Executive Director Let Freedom Ring, Colin Hanna, President Less Government, Seton Motley, President The National Center for Public Policy Research, Amy Ridenour, President National Taxpayers Union, Duane Parde, President Republican Pac, William Shaker, President RightMarch.com, Dr. William Greene, President Small Business & Entrepreneurship Council, Karen Kerrigan, President Smart Business Hawaii, Sam Slom, President Taxpayer’s Protection Alliance, David Williams, President Tea Party WDC, Lisa Miller, Organizer
