Republicans Could Prevent Tax Increases

Since the Republicans hold a majority in the House of Representatives, they could essentially prevent any tax increases from taking place.

"No, no, that isn't right" you say.  "The tax rates are scheduled to go higher, regardless of what the Republicans do."

For some reason, almost everyone forgets that spending bills originate in the House.  The Republicans in the House can basically dictate spending.  They can't spend as much as they want, but they can spend as little as they want.  They could simply refuse to pass a budget that is any bigger than $2 trillion per year (or pick any number).

Actually, it is even easier than that.  The Republicans could simply refuse to raise the debt ceiling, which currently stands at just under $16.4 trillion, which the Republicans helped to raise the last time.  Once that limit is reached (which will be shortly), then the federal government will essentially be forced to balance its budget, assuming Obama does not try to obtain pure dictatorial powers.

So what does balancing the budget have to do with tax increases?

There are two things.  First, total spending is really what matters anyway.  That is essentially the total taxes that we pay when it is all said and done.  Every penny that is spent by the government is money that comes from somewhere.  Regardless of where it comes from, it is consuming and misallocating resources.  It makes our standard of living lower.

Second, even tax rates would have to come down with a balanced budget.  While this may not be immediate, it would happen quickly.  If the federal government all of a sudden cut about $1.5 trillion out of the budget to bring it into balance, or even surplus, then the only thing to do with the extra money would be to pay down the debt or return it to the taxpayers.  It would not be hard at that point for taxpayers to demand lower taxes to go along with the reduced spending.

Of course, most people make the wrong assumption that Republican politicians in Washington DC actually want to cut taxes.  Most of them don't.  They just say they want lower taxes to get support from their constituents.

Now I understand many Republicans will say that the Republicans in the House can't refuse to raise the debt limit because the media will attack them and it will be political suicide.  But so what?  Then what is the point of electing them if they will never do what they say?

While I despise most of the Republican politicians, I do put some of the blame on the American people in general.  I would be curious to see what would happen if the Republicans in the House really did refuse to raise the debt ceiling (which they won't).  They would certainly be attacked by most of the media.  But would they lose badly in the next election?  I'm not sure I know the answer to that question.

Unfortunately, the politicians in DC are never going to scale back government on their own.  They will only do it if there is substantial pressure on them.  This means that a large portion of the American people need to withdraw their consent, at least up to a certain point.  It means that Americans must realize that big government is the problem and less government is the solution.

In conclusion, the House Republicans could quickly lower our taxes simply by dramatically cutting spending.  But they have no interest in doing this and they won't do it until there is significant pressure on them to do so.