Tax Increases Should Be Off the Table in Debt Limit Negotiations

Brian Darling / June 16, 2011

Congressional Quarterly reported yesterday that Democrats, led by Representative Chris Van Hollen (D–MD), are pushing to use “tax overhaul” as a means to cut a deal to increase the debt ceiling by $2.4 trillion:

Van Hollen also revealed that Democrats on the panel have “put a whole menu of options on the table” to eliminate corporate tax breaks, which so far have not been accepted by Republican members. The proposals include repealing tax breaks for the oil and gas industry, corporate jets and private jets, he said. “It’s a whole range of special interest tax earmarks in the code,” he added.

Conservatives want to get rid of those special interest tax breaks as part of a revenue-neutral comprehensive tax reform, not as a means to get more money for free-spending politicians to waste. It is good tax policy to rid the tax code of distortions that favor one sector of the economy over another, yet it is bad tax policy to remove every single distortion as a means to raise money for a federal government that has already spent us into a $14.3 trillion hole. (more…)