Conservatives Blast Tax Hike ‘Trigger’ in Reform Bill

NORQUIST: ‘A self-fulfilling threat to kill jobs’…

NORQUIST: Congress Must Act to Stop Obamacare Tax

Grover Norquist/Photo by Gage Skidmore (CC)

(Brendan Clarey, Liberty Headlines) Republicans, desperate to pass a new tax bill, have introduced a new measure that would increase taxes in case of extreme deficits, a “tax hike trigger.”

The provision attempts to ease fears that the proposed bill will make the government spending deficit worse by reducing the government’s income too much.

The “trigger” would hike taxes if the bill increases the deficit, according to a Bloomberg report.

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The controversial provision in the bill was introduced Tuesday by Senator Bob Corker (R-Tenn.) in the Senate Budget Committee.

Specific details have not yet been discussed on how exactly the tax hike would take effect, such as who would be taxed in case of deficit.

Organizations that support tax reform and other Republican senators quickly attacked the provision on Wednesday.

“It’s disappointing to see some in the Senate considering a provision that would automatically raise taxes as part of the Tax Cuts and Jobs Act. Including a trigger mechanism in tax reform is antithetical to the principles of the unified tax framework,” said Americans for Prosperity Chief Government Affairs Officer Brent Gardner. “Such a provision would add unnecessary complexity and uncertainty into the tax code, stifle the economy and generate less revenue.”

“Simplifying the tax code and keeping rates low, flat and fair is the best way to spur economic growth,” Gardner said. “Champions of pro-growth, comprehensive tax reform should oppose any attempt to include this harmful provision for the sake of the hardworking Americans depending on Congress to enact reforms that will deliver real tax relief and economic prosperity.”

Another pro-tax-cuts organization said the trigger will hurt investments because it promotes instability in the market.

“The key to pro-growth tax reform is permanence and certainty. This encourages job-creating investment,” said Americans for Tax Reform president Grover Norquist. “No one invests in response to ‘maybe.’ A trigger that threatens tax hikes is a self-fulfilling threat to kill jobs.”

Another group also warned that the potential impacts of a tax trigger would be very harmful for businesses and, essentially, economic growth.

“The idea of a ‘tax hike trigger’ should be rejected on its merits,” Club for Growth President David McIntosh said in a press release Wednesday. “Any senator who understands basic business principles and truly cares about the deficit should understand that this trigger is an automatic tax increase and will actually harm economic growth.”

“It will have harmful impacts on American businesses and undermine any economic growth potential in this tax reform bill because businesses will not invest due to the possibility of a higher tax rate,” McIntosh said.

Club for Growth claims to be the “nation’s leading group promoting economic freedom through legislative involvement, issue advocacy, research, and education” and boasts over 100,000 members.

“If they’re truly worried about the deficit and they want to establish a trigger, then they should limit the size of government,” McIntosh concluded. “A spending cut trigger would be a far better idea.”

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Some Republican senators responded harshly to the notion of a tax trigger.

“I can’t think of a worse way to tank the economy than to raise taxes,” said Rep. Jeb Hensarling (R-Texas) in an interview Tuesday on Fox News.

“Right now, my feeling about it is that I’d rather drink weed killer than vote for the thing,” said Sen. John Kennedy (R-La.), according to The Hill.

Some Republicans, like Sen. Ron Johnson (R-WI), hope they can pass the tax reform bill to help Americans.

“The problem in the House and Senate bill is so much of the tax relief is directed toward those big C-corps, which is only four percent of American businesses [and] only represent about 55 percent of taxable income,” said Johnson in a Wednesday interview with Bloomberg. “They are getting somewhere between 70 and 85 percent of the tax benefit. It is simply not equitable.”

Johnson later argued that the process of reform, though not easy, is ultimately worth the effort.

“We all realize we have to have pro-growth tax reform. Now we are in the legislative process, the sausage making,” Johnson said. “It is not pretty sometimes, but we are committed to achieving success.”