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Obama Justifies Raising Taxes as Cutting Spending in Tax Code
President Obama delivers his weekly address, published by the White House on July 2 (Image: White House)
(CNSNews.com) – President Barack Obama continues to call for tax hikes, invoking the need to tackle “spending in the tax code” as he targets what he says are special breaks for “millionaires and billionaires.”
During his weekly address on Saturday, Obama added to the populist rhetoric that featured during his White House press conference last week, when he said Americans must choose between paying for perks going to corporate jet owners and hedge fund managers, or paying for medical research and college scholarships.
In his weekly address, Obama appeared to say that taxes not collected by the federal government were the same as expenditures.
“Over the last few weeks, the vice president and I have gotten both parties to identify more than $1 trillion in spending cuts,” he said. “That’s trillion with a ‘t.’ But after a decade in which Washington ran up the country’s credit card, we’ve got to find more savings to get out of the red.”
“That means looking at every program and tax break in the budget – every single one – to find places to cut waste and save money,” the president continued.
“It means we’ll have to make tough decisions and scale back worthy programs. And nothing can be off limits, including spending in the tax code, particularly the loopholes that benefit very few individuals and corporations.”
Obama then suggested that Americans were faced with a stark choice.
“Now, it would be nice if we could keep every tax break, but we can’t afford them,” he said. “Because if we choose to keep those tax breaks for millionaires and billionaires, or for hedge fund managers and corporate jet owners, or for oil and gas companies pulling in huge profits without our help – then we’ll have to make even deeper cuts somewhere else. We’ve got to say to a student, ‘You don’t get a college scholarship.’ We have to say to a medical researcher, ‘You can’t do that cancer research.’ We might have to tell seniors, ‘You have to pay more for Medicare.’”
In the Republican response, Sen. Dan Coates of Indiana said Obama and congressional Democrats “must recognize that their game plan is not working. It’s time to acknowledge that more government and higher taxes is not the answer to our problem.”
Dan Mitchell, a senior fellow at the libertarian CATO Institute, argued that tax cuts or loopholes cannot be compared to expenditures, and warned Republicans not to “fall for this sophistry.”
“If legislation is enacted that results in more money coming into Washington, that is a tax increase,” Mitchell wrote.
Tax breaks do not constitute spending, he said.
“When politicians tax (or borrow) money from one person and give it to another, that’s government spending. But if politicians allow a person keep more of their own money, that’s a tax cut.’”
Mitchell also acknowledged that the tax code is “riddled with inefficient and corrupt loopholes.”
“But those provisions should be eliminated as part of a fundamental tax reform, such as a flat tax. More specifically, every penny of revenue generated by shutting down tax preferences should be used to lower tax rates. This is a win-win situation that would make America more prosperous and competitive.”
