Geithner Admits Tax Increases 'Hurt Growth'

Testifying before the Senate Budget Committee on Thursday, serial tax evader and Treasury Secretary Tim Geithner acknowledged that tax increases “hurt growth,” yet under questioning by Sen. Mike Crapo (R-Idaho) at the hearing, he weaseled out of answering questions about a timetable for implementing the massive tax hikes planned by the Obama administration.  

From an exchange at the hearing:

Sen. Crapo:  “You say that the tax increases will only happen when the economy has recovered.  I understand that a lot of economists are saying we are going to be recovered by 2011. Frankly, I think there are economists who are saying maybe our recovery will not be so strong by then.  My question to you is, are these tax increases contingent on a recovery. or are they going to happen regardless of what happens in 2011?”

Sec. Geithner: “Senator, I think it is a very important question.  I think, again, we need to lay out an ambitious path for bringing those deficits down, commit to achieving that with a mix of measures on the resource side and the spending side to do the best possible job of leaving our economy stronger, and that’s what the President’s budget tries to do.  Now of course we are going to have to watch how the economy evolves, and I want to underscore that one of the mistakes governments have made over time in dealing with economic crises is putting the brakes on too quickly or in ways that hurt growth just as it’s starting to take hold.  We just want to be careful not to do that.”

Sen. Crapo:  “So are you saying if we don’t see the more rosy picture in 2011 that we may not see the administration suggest that we move to enact tax increases?”

Sec. Geithner, “I’m just saying that recovery requires that we keep stimulus sustained until growth is in place, but we have to do it in a fiscally responsible way.”

Remember when we were told by the president and Senate Democrats that Geithner was astonishingly brilliant, the only person who could solve our financial woes and, despite his serial non-payment of income taxes, he must be confirmed post-haste?  Just checking.

“Obama and Geithner are putting the brakes on the economy now.  Unlike Secretaries of the Treasury, small businessmen and women plan their investment and hiring decisions based on the tax burden years in advance,” said Grover Norquist, president of Americans for Tax Reform, a non-partisan coalition of individuals and groups who oppose all tax increases.  “Telling someone you are going to dramatically raise their taxes later is a disincentive now, not just in a matter of 22 months into the future.   That is, unless you are one of Obama’s cronies and you don’t pay your taxes anyway.”

Democrat leaders in the House met for a second day with Peter Orszag, head of the White House Office of Management and Budget (OMB), on the most effective way to shove down America’s throats the proposed $3.5 trillion Obama-Pelosi far-left socialist dogma Democrats have the chutzpah to call a budget.  Orszag was a no-show at the media stakeout outside the meeting, having been secreted out a back door, so I asked the member who did show up to take questions, Rep. John Larson, chairman of the House Democratic Caucus, about the Geithner admission that taxation hurts growth and if there was any plan to make the massive tax hikes in this budget contingent upon the state of the economy.  

“I think he was referring to the — I don’t think — in this budget, 95 percent of the Americans are getting a tax cut so we certainly agree with that, and certainly this Congress and this president have been mindful of what tax cuts and tax increases can do, and yet … from the standpoint of fees and other particular programs, some may be necessitated as you go down the path — some may be necessitated to make sure you bring down the deficit, but there was not that discussion today,” Larson said.

I followed up by asking if Democrats consider “cap and trade” a tax.  Larson responded, “Inasmuch as we haven’t got a firm policy yet in place now, there’s broad agreement with respect to the desired goals achieved by cap and trade, the mechanism to how we get there hasn’t been finalized yet, so I’d say that’s still an open question.”

Unless the 95 percent of Americans that Democrats claim are getting a “tax cut” are going to sit in the dark not driving, cooking, going to work or adjusting their thermostats, among many other activities, the cap and trade carbon tax initiative in the Obama budget will place a staggering tax burden on every individual and family in America regardless of whether Democrats decide to call it a tax, a fee, a program, or a trip to Tahiti.