Steve Forbes Urges Boehner: No Tax Increases, Just Fight for Renewal

Friday, 07 Dec 2012 05:54 PM

By Bill Hoffmann

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John Boehner is making a big mistake by calling for tax increases by closing deductions and he shouldn't be trying to make majore reforms in the short time left before the fiscal cliff is upon us, Steve Forbes has told the House Speaker.

Instead Forbes, the influential CEO of Forbes Inc. and editor-in-chief of Forbes magazine, has formulated a plan spelling out what Republican lawmakers must do now to stop the country from falling off the fiscal cliff.

"Mr. Speaker, we are losing the cliff war in terms of public opinion, but the tables can be turned,’’ Forbes writes in an open letter, posted on Forbes.com just hours after Boehner emerged from negotiations with Democrats to say that “no progress" had been made.

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"A few days ago you offered tax increases via eliminating or capping deductions. Your generous gesture won no goodwill from Democrats and the mainstream media. Moreover any tax increase now only damages the economy. Concerning deductions, why give stuff away now for no real tax reform or simplification?"

First, Forbes says, the House must pass a bill extending for a year or at least six months "all the cliff items — current income tax rates; the Alternative Minimum Tax patch; yes, even those Social Security payroll tax cuts. The whole kit-and-caboodle. The same with sequestration."

He said Republicans must make the point that the U.S. economy is headed for recession.

"One ill omen is that business investment is faltering. Any tax boost will be particularly perverse. Destroying capital and hurting small businesses will only contract the economy even more," he says.

The United States should not "follow the bad examples of Western Europe and Japan. These countries are all raising taxes and the results are frightening. Japan’s economy is declining. Southern Europe is in a severe recession. France and Germany are about to go into recession. Britain just reported disappointing economic news and experts believe its economy will go into negative territory."

Forbes calls efforts to try to reform the tax code and entitlements little more than two weeks before Christmas "ridiculous." And he says he is concerned about "the rich" label Democrats have slapped on the wealthy.

"The polls show that if the question is rephrased as to whether the economy would be helped if upper-income couples had their tax bills increased substantially, most Americans are opposed to the hikes," he says. "We should learn how to phrase these issues instead of employing the Democrat’s vocabulary."

Next, Forbes continues, Republicans should "turn the tables on the White House debt ceiling proposal by passing a bill mandating that Social Security trust fund assets — now held in useless, non-negotiable IOUs from the Treasury — be converted to marketable Treasury bonds which should have been done decades ago."

That way, he says, if there is a debt ceiling impasse early next year Social Security and Medicare payments won’t be jeopardized.

"The trust funds could just sell on the open market bonds to raise the cash to make payments. Those trust funds are supposed to have more than $2 trillion in reserves. Instead, they are loaded with phony, illiquid assets."

The House should also pass a bill mandating that no money can be diverted from Medicare to pay for ObamaCare, according to Forbes.
"Senate Republicans can have fun with this when Harry Reid blocks a vote," he says.

A resolution must also be passed that the House of Representatives "will not accept any entitlement reform that reduces benefits for those who are on Medicare and Social Security or who are about to go into those programs," Forbes, who ran for teh Republican nomination for the White House in 1996 and again in 2000, says.

Editor's Note: 5 Signs Stock Market Will Collapse in 2013

And finally, Forbes recommends the passage of a bill "suspending all of those ObamaCare levies that hit next year. Again, we don’t need to burden an already wobbly economy."

Forbes tells Boehner: "Let’s stop negotiating with ourselves. Let’s take charge of the terms of debate.

"By drawing a line on tax increases you will help the economy and you will begin the process of turning around public opinion; that won’t happen overnight but these bills would be an exciting start. Go on an optimistic offensive!"

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