Ryan Ellis's blog

There Are No Such Thing As Tax Earmarks

Promoted - Ryan Ellis is the Director of Policy at Americans for Tax Reform.

Rich Lowry and others are calling tax cuts in the Senate bailout package "earmarks" today.

Calling tax cuts "earmarks" is very unhelpful and completely wrong from a fiscal conservative perspective. There is no such thing as a “tax earmark.” Earmarks are spending. There are appropriations earmarks. There are authorization earmarks. There are no “tax earmarks.” To claim that there are puts tax deductions and credits (which is what we’re talking about here) on the same par as bridges to nowhere. Was the creation of HSAs a “tax earmark?” How about the home mortgage interest deduction? One might call for lowering the rates and broadening the base, but we should not fall into the trap of equating tax cuts and spending increases. That’s how some Senate Republicans got in such massive trouble over health care last year and energy this year vis-à-vis taxes.

A tax cut is not the same thing as a spending increase.

Here’s a thought experiment for the dubious: suppose we eliminated the mortgage interest deduction and had HUD give every homeowner a $10,000 subsidy to pay his mortgage.  It’s all good, right?  Heck, we’re just replacing a “tax earmark” with a “spending earmark.”  Except that this “swap” would increase taxes and increase spending by hundreds of billions of dollars a year.


A Conservative Blueprint for Health Care

Ryan Ellis is the Tax Policy Director at Americans for Tax Reform

The liberals are setting us up for a tax increase, and they’re using health care to do it.  They want to double federal taxes as a percent of the economy from roughly 20% today to 40% over the next half-century.  Most of these new taxes would go toward socialized medicine.

That’s their game plan—what’s ours? 

Let’s start with principles, and move toward policy goals.

Principle 1: Conservative health care reform should neither raise taxes nor increase the size of government.  You’d think this would be a no-brainer, but trust me that it isn’t.

Principle 2: Health insurance should have nothing to do with your job unless you want it to.  In any event, health insurance should be 100% portable.

Principle 3: Shopping for health care should look more like currently shopping for prescription drugs, dental, vision, and cosmetic surgery, and less like going to the hospital or getting a checkup.  The former is price transparent and market-responsive.  The latter is bureaucratic and doesn’t work

So what’s in the conservative package?  Thankfully, someone has already put that together—the Health Care Freedom Coalition (full disclosure—ATR is a charter member).

This is quite literally the free market package of health care reforms.  It doesn’t raise taxes—it cuts them.  It doesn’t grow the size of government—it shrinks it.  It doesn’t curtail the consumer—it liberates him.  If this plan were passed, the size of government wouldn’t just stay at 20% of GDP—it would shrink to 10% over time.

So here’s the question: what do you think of the policy list?  Anything missing?  Anything which should be tossed?  Anything need tweaking?  Unless we get positively engaged in the details of the healthcare debate, the Left (who knows this stuff far better than most of us) will eat our lunch.

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