Dear Speaker Boehner: An Open Letter on the Debt and Budget

As signs continue that the debt ceiling crisis is now going to negatively impact the United States and world economy — even if there is some eleventh hour solution — here’s a must-read: an open letter to House Speaker John Boehner. The author: Michael Stafford, a 2003 graduate of Duke University School of Law and a former Republican Party office who works as an attorney in Wilmington, Delaware and is the author of the book “An Upward Calling” on the need for public policy and politics to advance the common good. Here’s part of it:

As a Republican, I have followed your handling of the debt ceiling negotiations, and the future of the federal budget, with mounting concern. You appear to be engaged in a game of partisan brinksmanship with our nation’s financial future. Now is not the time for scoring political points or playing to the fantasies of the anti-government libertarian zealots within our Party.

Your handling of the debt ceiling negotiations, and the prior budget proposals advanced in Representative Paul Ryan’s “Path to Prosperity,” makes it clear that the GOP is more concerned with protecting the interests of America’s most wealthy citizens, even to the detriment of the rest of us, and to the common good. For example, it is farcical to frame the debt and the deficit as merely problems of spending- they are, in fact, issues created by both expenditures and revenues. Nor is taking an axe to the federal government an acceptable solution- traditionally, we conservatives have been in favor of a limited government, not an eviscerated one. In the end, we simply have to pay for the services we expect government to provide. As such, a discussion of raising additional revenue- taxes- must be a part of any long-term solution.

Our corporations benefit from one of the lowest effective rates of taxation in the industrialized world. And yet, under your leadership, Congressional Republicans have dug in their heals and- for the most part- refused to consider closing tax loopholes for big business or, most importantly, raising income tax rates for the wealthiest Americans.
Such a solution, coupled with spending reductions and entitlement reform, is just and equitable. It recognizes two fundamental realities: first, that corporate profits have increased during the present “recovery” even as wages, and hiring, have not. Second, that the top 1 percent of income earners in America have amassed an increasing share of our nation’s wealth over the past several decades while wages for most Americans have stagnated or declined.

In the Book of Genesis, God famously asked, “Cain, where is your brother Abel?” This question still resonates today- it reminds us of our duty to care for the poor, the elderly, the disabled, and the most marginalized elements in society. Does the Republican Party no longer see any role for government in providing for these groups? That certainly seems to be the case given the spending cuts proposed by Congressman Ryan. While some entitlement reform is necessary, the cuts in Rep. Ryan’s plan amounted to a repudiation of our collective responsibilities towards our fellow citizens. Speaker Boehner, do Congressional Republicans know where their brother Abel is today?

Every American understands that sacrifices are necessary. But sacrifices demand a balancing of benefits and burdens. Is it right and just that those Americans who have benefited the most from the economic growth over the past 30 years and from the recovery should see their burdens lightened in this time of fiscal crisis while those who have benefited the least- average Americans who have seen their jobs outsourced overseas, their wages stagnate or decline, their benefits reduced- are told to carry an additional share? I think the answer is obvious: it is not.

GO HERE to read the rest.

19 Comments

  1. Excellent letter that gets straight to the nitty gritty. Thanks for posting.

  2. People like Mr. Stafford used to form the base of the Republican Party. Unfortunately, that is no longer the case.

    His letter is a reminder, though, that there are a lot of people who would support the party if its priorities changed.

  3. The democrats have just as many rich freinds as the republicans do.

  4. If the letter writer is honest, he’ll write another letter at least, if not more, detailed and critical to the Democrats, perhaps to Obama if he wasn’t planning on a separate letter to Obama, anyway. (Obama has much to answer for, himself.)

    Among the things the letter(s) could say is, “Where is your budget? Why didn’t you have a budget for the years preceding the 2010 elections? This was one of many reasons the people rejected you.”

  5. @ RainsGD
    Yes, but they are not all the same rich friends.

  6. DLS:

    The (Dem-majority) Congress passed budgets for FY 2008, 2009, and 2010 fiscal years. The House Dems passed a budget for the 2011 fiscal year very late in 2010, but Senate Republicans killed the bill by holding it up until the new GOP majority took over the House in early 2011.

  7. Too bad the author is so wrong on tax rates.

    http://alhambrainvestments.com.....ntry-oecd/

    As you can see we are second only to Japan on corporate tax rates. In addition we are the only country that requires additional taxation when already taxed profits from overseas is brought back into the country.

  8. rccola_48 – You can’t be that naive as to believe that the nominal tax rate has any bearing on taxes that are actually paid. Because of the numerous legitimate deductions (R&D, depreciation etc)as well as the gaming that goes on (intellectual property transferred to a low or no cost country and leased back to the US at a VERY high price) the actual tax rate in the US is closer to 15%.

  9. “The (Dem-majority) Congress passed budgets for FY 2008, 2009, and 2010 fiscal years. The House Dems passed a budget for the 2011 fiscal year very late in 2010, but Senate Republicans killed the bill by holding it up until the new GOP majority took over the House in early 2011.”

    Even if that is accurate and complete (and I don’t think it is), that still means that House Democratic leadership was unable to leverage its total control to get a 2011 budget done until well after the 2011 fiscal year had already begun. Given how the House always operates (minority party has no control at all), there is simply NO WAY to legitimately blame Republicans for that.

  10. “You can’t be that naive as to believe that the nominal tax rate has any bearing on taxes that are actually paid. Because of the numerous legitimate deductions (R&D, depreciation etc)as well as the gaming that goes on (intellectual property transferred to a low or no cost country and leased back to the US at a VERY high price) the actual tax rate in the US is closer to 15%.”

    I agree. Let’s get on with a dramatic simplification of the tax code, closing down loopholes and making the actual rates lower as a result. Then we will be also be able to argue much more coherently about what the rates should be when those rates reflect what people ACTUALLY pay.

    I should note that this has been a Republican goal for many years and that it has consistently been Democrats who are opposed to it. Perhaps that might cause you to change your position on the subject. ;)

  11. There’s a lot of ignorance or badly (destructively) wishful thinking out there, not only about a “more responsible” [sic] position and conduct by the Democrats (the public correctly said the opposite in November 2010) but about corporate tax rates. We need to lower them to be closer toward the median in the OECD.

  12. Not only did the Democrats fail with their budget (no, the demented extreme-left “People’s Budget” [raised fist not included] doesn’t count at all), but don’t forget that’s a big failure of Obama, too. We’ve never seen a plan from him, just failure and sniping from the sidelines, as his chosen behavior (along with loser-appeal campaign demagoguery already for 2012).

    It’s interesting that those of us who are informed and post to this site don’t say the House GOP is correct or proper, but we don’t neglect the equally-bad-to-worse problems the Dems are making, either. That’s much different than what the uninformed do.

  13. rccola_48

    Yeah, GE paid 36% of the 12 billion they paid dividends on,,,,oh wait a minute, they didn’t pay doodlem.

    MS said EFFECTIVE tax rate, If you are gonna repeat the verbal diarrhea conservative wingnuts pass as talking points at least pay attention.

  14. Another thing,

    The only people who pay the 36 percent are the poor small businesses who have crappy tax people. They BTW are the people who the conservatives say they are trying to protect with personal income tax rates and keeping the corporate loopholes that screw the small businesses.

  15. Note, D.R. Welch, a rare piece of legitimate criticism (notably even more on this far-left Web site with similar user community, not just the obvious authors) that the House Republicans apparently reject true tax reform, which eliminates the exceptions, “loopholes,” or as we might say, special tax and other privileges the GOP-interest (big) business community defends.

    (It merits only short mention of what’s over so many’s heads, that fascism has been the Western Left’s preference for structuring any government interventionist measure or system — the “managed cartel” approach — and that normally regulation and regulators favor big business.) (Ownership is secondary to control.)

  16. Wait, you mean we are supposed to look at effective tax rates and not statutory, marginal ones? I thought I just finished a whole thread with various folks here telling me that using effective tax rates was playing with the data to make a point.

    I’m so confused….

    …not really. DR is correct. Only the effective tax rate matters. That said, the rate is a good bit higher than 15 percent and a good bit lower than the statutory rate of 35.

    http://www.tax.org/www/feature.....enDocument

  17. Although that link is matching tax receipts ( cash basis) with reported profits ( accrual basis). While getting the deferral of payment is indeed a benefit, it is a bit disingenuous to adopt that measure as the “effective” tax rate. There are relatively few permanent differences available in the tax code.

    And no, DR is not correct…GE still needs to provide taxes on unrepatriated earnings. Therefore, it would be impossible under GAAP to pay dividends out of non-tax-effected earnings.

  18. Sorry CO, I wasn’t talking about the dividend tax issue, just about the notion of using an effective tax rate.

    As to the difference between GAAP earnings and cash taxes, you are correct but there’s no perfect measure of effective tax rates given the complexity of the code. I think it right to argue that the “real” effective rate is a good sight lower than the statutory rate. I wouldn’t argue if you wanted to tell me it was some other number that had 2 digits to the left of the decimal and started with a 2 ; )

  19. Cash, accrual, …..

    GE made 3.2B here hid 9.2B overseas and paid 0 in taxes.

    My old engineering firm (a real small business) paid 36% on all profits as a corporation.

    Is that really where conservatives want us to be as a country, really? Is this system what you are advocating?

Submit a Comment