New CF&P Video Debunks Claim that Tax Hikes are Required to Balance the Budget
(Washington, D.C., Monday, October 4, 2010) In a new video released today by the Center for Freedom and Prosperity Foundation (CF&P), Dan Mitchell of the Cato Institute debunks the statist claim that the federal budget can only be balanced through massive tax hikes. Entitled "It's Simple to Balance the Budget Without Higher Taxes," this new CF&P video shows that balancing the budget is easily achievable with a modest amount of fiscal restraint - even if the 2001 and 2003 tax cuts are made permanent.
Using numbers from the Congressional Budget Office, the video shows that the budget can be balanced without any dramatic cuts (though it would be a good idea to
sharply reduce the burden of government spending). All lawmakers need to do is limit spending growth and allow revenues to catch up. Under a hard spending freeze, for instance, the budget would be balanced by 2016.
And if spending is limited to 2%, the budget would be balanced by 2020.
These scenarios even assume that the 2001 and 2003 tax cuts are extended. The video concludes by exposing how politicians disguise federal spending growth and muddy the debate over the size of government.
Projected spending increases are incorporated into a "baseline budget," which is then used to claim that merely reducing the rate of spending growth is a budget cut. Politicians then dishonestly claim that trillions
in cuts are required to balance the budget, unless overtaxed voters hand over yet more of their hard-earned dollars to the federal government.
"The right way to balance the budget is to limit the growth of government," said CF&P Foundation President Andrew Quinlan, who added
that "higher taxes, by contrast, would be like trying to cure an alcoholic by giving him more to drink."
"The goal of fiscal policy should be small government and more freedom," said the video's narrator, Dan Mitchell of the Cato Institute, "but this video
shows that people who want a balanced budget should focus on the same thing - restraining the growth of government."
Politicians and interest groups claim higher taxes are necessary because it would be impossible to cut spending by enough to get rid of red ink. This Center for Freedom and Prosperity video shows
that these assertions are nonsense. The budget can be balanced very quickly by simply limiting the annual growth of federal spending.