Patrick Knudsen

Patrick Knudsen

Heritage Foundation economist Patrick Knudsen explains what Congress should do to solve the “fiscal cliff,” the massive tax hikes and defense spending cuts coming in January.

  • Preclude the huge tax hike known as Taxmageddon;
  • Prevent the reckless, automatic defense cuts, preferably by choosing alternative savings;
  • Renounce any other tax increases;
  • Resist the temptation to conjure further ad hoc budget schemes and grand bargains; and
  • Return as soon as possible to the regular practice of congressional budgeting.

What ideas do you have?

Comments (21)

sandra barron - November 14, 2012

My husband and I cannot understand why you don’t tax the rich. We live in a rich neighborhood. What happens to them if the country goes down the tubes??????

The Catholic Church tells us t o take care of the poor.
Make the illegals citizens and let them pay their taxes and pay into medicare. Close the border and send the criminals back to Mexico. We are very upset that because they are going to becitizens anyway. So why didn’t we do that?????

Michael Pitts - November 14, 2012

As a weary conservative-who’s questioning everything I ever knew-I am torn. Do we root for failure ie. give the new FDR everything he asks’s for & watch the implosion? Or do we fight for what’s right with the possiblity that the electorate is on a permanent Eurpoean vacation? This is a startling paralell to Hoover/FDR era-including a potential modern day Holocaust. It’s incredibly sad!

Roger Schweikert - November 14, 2012

Thanks for your suggestions regarding the current levels of federal taxing and spending, Mr. Knutsen. Barry Goldwater, however, once similarly described how difficult it was to actually make any specific spending cuts despite the often easy rhetoric and real need to do so. And multiple other citizen leaders throughout our nation’s history from Benjamin Franklin and Thomas Jefferson to Joint Chief Mullins, Mitt Romney, President Obama, and Larry Kudlow have all at least given some lip service to the debt but without actually doing much since 1835. For this reason, what I would suggest is for Republicans in particular to take up the President and Vice President’s own words to frame one possible generationally accountable long term solution to the existing debt, during the current lame duck session. Mr Boehner and the Republicans should challenge the Democrats and their fellow Americans to stop “perpetually kicking this can down the road” by drafting a bill which I would entitle: “The 2012 ‘Your Fair Share’ Federal Debt Reduction and Voter Fraud Reform Act.” The chief provision of the act would be to incorporate CBO calculations similar to what the National Debt Clock predicts is every “citizen’s” (and resident non-citizen’s) “fair share” of the national debt and demand a minimum $1 “Patriot Tax” from each of us by December 31st of this year with subsequent annual minimum payments due between July 4th and election day as a prerequisite to vote while doubling the minimum amount due each subsequent year from the year before until each individual (or family) share of the debt is paid. Of course, if the “rich” prefer, they can pay off their “fair share” in the first year of this tax as well as any share owed by any surviving members of a military family who lost a loved one in a declared war. And in addition to paying the tax, each voter must sign one or more promissory notes for his or her fair share to include a minimum $1 “Patriot tax” for any state and local indebtedness and an additional $1 to cover the costs of elections (which would either be a minimum of $2 for not voting, or actually forgiven if you actually voted) This way I doubt any voter would want to voluntarily try to vote multiple times in one year when doing so accompanied signing several promissory notes. Currently the federal and state portions of these “bills” in Virginia are $51,657, and $7,447 respectively.

Glynnda - November 16, 2012

First we repeal Obamacare, second we cut everything across the board by 10%. Third we ditch the tax code and pass the Fairtax which will increase revenues exponentially and take care of lower income people. Last we regulate Congress and the president’s ability to pass spending legislation and executive orders.

Ms Mike Acton - November 16, 2012

Patrick is correct! Thank you Patrick. Great job.
Now see if you can get the progressives to go along with it. That is the true “Impossible Mission”

Reg Dunbar - November 16, 2012

Drastically reduce or even eliminate corporate taxes. This would dramatically increase investment in U. S. businesses. Corporations could then operate in a manner that is in the best interest of their stockholders and employees rather than having to consider tax ramifications.
This would make the U. S. the best and safest place for both U. S. citizens and foreign investors to invest. Reducing or eliminating capital gains tax would also be a big boost.
The U. S. economy would take off like a rocket. With near full employment (i.e. more taxpayers) and fewer people dependent on welfare; it would go a long way toward reducing our financial problems.

Susan - November 16, 2012

Since the House has some power, they must use this leverage to amend the implementation dates of the AFCA and, if they cannot make a solution to the sequester, amend the implementation date on that to 2021

James Dobbins - November 16, 2012

1. To address medical cost, you have to both repeal Obamacare and institute serious tort reform. If you don’t do tort reform, no matter what else you do will be insufficient.
2. Eliminate ineffective federal departments and those not authorized by the Constitution; restructure or eliminate federal departments not achieving their purpose.
3. Transfer to the states responsibility for all functions that can be more effectively performed at the local level.

William M Snedden - November 16, 2012

Implement “Saving the American Dream” but modify the tax reform to take the best idea from the FAIR Tax proposal by implementing a consumption tax to cover ALL the social programs and leave the remainder required to meet the revenue neutral criteria as a FLAT tax on income as in the SAVING document. The only change would be a smaller flat tax and an enormous increase in the number of people paying into our social programs. Even the crooks, visitors to our country, and tax evaders buy stuff! The reduced work load on the IRS could free up most of the 100,000 IRS employees to rundown and arrest the fraudsters that are eating up a big chunk of the social program resources.

Robby - November 16, 2012

Get rid of Obama-care,tax and we would be halfway .
Tax the 49% who are not at this time paying .
stop all subsudies,If you can’t afford it save up till you can.stop all bailouts of any buisinesses includeing
unions.we ar paing for the destuction of freedom.
forgive spelling errors. Robby Boyles

James Dobbins - November 16, 2012

Raising taxes on the rich is like adding an inch to the height of a levee in the face of an impending 10 foot flood. You do not create jobs doing that and jobs are what we need. We need to get people off the federal dole and help them become self-supporting.
Focus on job creation. Make working or training for work a condition of receiving any government welfare benefits.
Cut capital gains tax. Lower income the tax rate on everyone. Cut corporate taxes by at least 25%. Do a zero-based review of all government programs.
Transfer as many job creation stimuli as possible to the states.
Create incentives for bringing back jobs from overseas and address foreign subsidizing of products and labor. Focus on “Made in America” and make that means high quality.
Initiate a program of electronics independence in America just like we are trying to achieve energy independence.
Return government operations to what they should be,what they were meant to be by our Founding Fathers. Create the opportunity for life, liberty and the pursuit of happiness; do not try to make these government grants.
Eliminate every vestige of socialism from government, and bring God back into our culture. We are a Judeo-Christian country and so we should act like one.

MK McMillion - November 16, 2012

What Congress should do to solve the “fiscal cliff,”…
Vote “present”. Let the Democrats own it. They will anyway, why be part of it?

Hugh Campbell - November 16, 2012

Everyone should pay taxes. Everyone. No exceptions. Everyone needs skin in the game. Across the board, everyone pays 10% of their income. The government then figures out how they are going to live within that budget and pay down the debt. No borrowing, no deficit spending. If we can do health care w/in the budget, that’s fine, but we have to live within the budget. It’s that simple. We forget that we did just fine w/out income taxes until 1913 and the 16th amendment. That’s when we started looking to the government to be our sugar daddy. Uncle Sugar has some serious health problems, not to mention an insatiable spending problem, don’t you think?

Mike Townsend - November 16, 2012

I would cut all Global Warming stuff from all of the divisions of Government claiming it is the Lefts only religion.

Robert Schuster - November 17, 2012

As to what I would suggest to balance the budget: a) do not “protect” welfare, b) see suggestions from Citizens Against Government Waste.

Andy - November 17, 2012

Hold the line and under NO Circumstances increase the debt limit. Force the president and congress to comply with the law that requires a budget. We don’t have a tax revenue problem. We have a SPENDING problem. Cut entitlements back drastically and people will go find jobs. Cut some from non essential military budget but strengthen. Lord knows the military is replete with wasteful spending and government overhead. The Catholic Church does not say we can steal from the rich to give to the “so called” poor. Taking care of those in true need is the responsibility of 100% of the population, not just the 1% and should be handled through our churches and charities, NOT the federal government. Liberal policies serve only to hurt the poorest of us, create more poor and destroy the fabric of society.i.e walfare and the cycle of povery and dependence. Americans voted to put conservatives in charge of the checkbook and until they stop capitulating to the wreckless demands of the Administration and show some fiscal backbone we will create more poor and suffering people. The fiscal cliff is a myth, a demon created by the media to make us all think we have to increase the debt limit. WE DO NOT increase the debt limit and we fight it out in congress for what gets funding with the tax revenue we have. If we cave it is the fault of John Beohner and the Republicans in the house.

AJ Edmisson - November 17, 2012

It seems to me that the whole delineation of “rich” and “poor” is a crock. We are all Americans; as such, we all need to have “skin in the game”. Why is it “fair” that people who make more than $250,000/yr should pay more, while those who make $40,000 to $249,999 should pay less, and those who make up to $39,999 pay nothing at all (or get money from the Federal Gov.?) This is a hard time for our country, and everyone should be willing to sacrifice for the greater good. If some one should pay more, we should all pay more; and if private citizens have to do with less, so should our government, including the so-called “entitlements” receivers.

Mark Herndon - November 18, 2012

I am weary of excessive taxes but not adverse to the concept if the distribution of those taxes is balanced. I am deeply offended by Senator Reid’s phrase “finally pay their fair share”. If you have paid your legal liability set by prior congresses then you have paid your fair share. To minimize the annal deficit AND inform our populace of spending, lets try a deficit surcharge. Take the Oct 31 federal deficit (about $1.2 trillion), and divide that equally among tax filers (note that I didn’t say tax payers, which is a much smaller group) to be added to each filer’s year-end liability calculated under current law. That would quickly illustrate the size of the problem and how the issue should be shared equally. The approximatly $12,000 incremental bill would be a shock to most families budgets and would certainly result in less people filing, such as those who are net collectors under current law due to various credits and the like. Of course you could modify to weight differently but it begs the question why should one person incur more of this excessive spending penalty than any other? It would also motivate the spenders in DC that if they want to minimize that number every year (presumably so that there is not widespread anger at them) then they should implement effective policies to balance the budget under existing law and end the giveaways that they have such a propensity for.

Holly Chapo - November 18, 2012

Go after government waste in all departments and that includes Medicare, Medicaid and Social Security.

Daniel W. Lewis - November 18, 2012

We as pro-american conservatives have lost the country to the greedy socialists who depend on the gov. or wish to rule those who do.

The only issue now and before is government spending especially welfare spending or transfers from the productive to the takers who then become dem voters.

Cut or eliminate this $1 T + spending and taxes will take care of themselves.

Tell republicans no crossing the aisle no compromise with the socialists who are intentionally destroying the country,

Old news that did not get out there: 1. Recession started under Bush – true but why? it was the excessive start of spending by the pelosi/reed congress that started the downward debt spiral. And Bush a decent guy was so vilified by the leftist press that he could not or would not stop it. 2. In the 90’s we had some economic growth under the scumbucket clinton – but why? It was the Gingrich congress that cut wasteful and excessive spending and brought the deficit under control.
These 2 points were rarely heard by the recent hapless campaign by RINO’s not conservative republicans.

The democrats have not and will not cross the so called aisle to compromise – When has there ever been a cut or elimination of welfare programs.

And if there are cuts to entitlements – OPPOSE means testing to qualify – it should be all or none. If there is means testing this will mean that the productive conservatives will pay and pay and the democrat welfare scum will get all the benefits having never contributed into the system.

The only entitlements that should be maintained are SOC SEC and Medicare. Why – only because so many of us have been forced to contribute to the system for lifetimes and should not lose. But cut or eliminate everything else – all 80+ welfare programs – they are vote buying schemes and now we know that they were successful.

So main message to republicans in the house – CUT SPENDING and all those give away welfare programs.

Propose 20/20/20 All gov agencies and programs. Immediate cut of 20% of benefits – immediate cut of 20% of headcount and 20%

Naomi VanHart - November 19, 2012

I propose immediate, drastic cuts to ALL of our SENATORS AND CONGRESSMEN’S SALARIES. I would cut their salaries 50%. Also, Education does not need more money. The money they have already received has been misappropriated. (ex: Swimming pools are built before buying text books.) I predict that the Dems will drill to get America out of its debt. This will create wealth even though Democrats lied to their supporters who recently voted them in, claiming that they were against fracking.

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