President Obama and the Democrats are fixated on raising taxes on people who make more than $200,000, as well as small businesses who file as individual taxpayers, major corporations, and investors by raising their capital gains tax rate.
But these taxpayers pay the lion's share of all income taxes. Raise taxes on capital gains and you will get less venture capital investment and a weaker economy. Fewer Americans will sell assets they hold to plow their gains into higher performing, growth investments if the capgains tax rates take a bigger bite out of their profits.
Without knowing the full details of Toomey's plan, he is following a tried and true fiscal path to economic growth. We've had many recessions and downturns in the last five decades, and lowering the tax rates have always helped our economy recover and made it stronger than before.
The Kennedy across-the-board tax rates in the 1960s. The Reagan tax cuts in the 1980s, followed by the broader and bipartisan tax reforms of 1986 that got rid of a number of tax breaks, exemptions and other loopholes in order to lower the rates, cutting the top marginal rate to 28 percent as Toomey would do now.
And let's not forget the Republicans' pro-growth capital gains tax cut President Clinton signed in his second term that unleashed a wave of high tech capital investment that led to full employment and a budget surplus.
Even the Bush tax cuts in in 2001 and 2003 helped us get through several financial catastrophes, cut the deficit in half and produced a 4.7 percent unemployment rate in 2007 just before the subprime, home foreclosure scandal drove us into severe recession.
Still, it is hard to see this bitterly divided supercommittee producing a well thought out growth incentive plan under such a tight deadline, before Thanksgiving.
The driving force behind its creation in the federal debt limit battle was a series of annual budget deficits under Barack Obama's presidency that climbed to $1.5 trillion in his first year and hit $1.3 trillion this year. The total federal debt now stands at a whopping $15 trillion.
But the members of the supercommittee say they are no nearer to a deal now than when they began. They have agreed on a large number of spending cuts, but clearly the stumbling block remains the issue of taxes. Maybe the best course would be to set that issue aside for the time being, turning it over to the tax-writing panels of Congress, and concentrate on a plan to cut spending.
The supercommittee's mission is to cut at least $1.2 trillion over 10 years. That comes out to a little over $100 billion a year out of a nearly $4 trillion annual budget that wastes more than that sum each and every year.
If they can't agree on even that amount in savings, then I say, let the automatic budget cuts -- triggered under the debt limit deal -- begin.