Republicans can still win the fight over taxes

Marc Thiessen:
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STEP ONE: Stand your ground on taxes. You’ve already conceded hundreds of billions in new revenue through limiting deductions. If Obama refuses to compromise, pass legislation extending current tax rates for all Americans. Let Obama reject it and take us over the “fiscal cliff” — and then be prepared to live under the Clinton tax rates while negotiations on tax reform continue. In the short term, Americans may blame you. You can recover from that. What you will never recover from is surrendering your principles and giving up your brand as the party of low taxes and limited government.

STEP TWO: Go on the offensive. Immediately put forward a plan to fundamentally reform the tax code. You will be able to outbid Obama and the Democrats in any tax-cut fight. And the intellectual groundwork has already been done. During the supercommittee negotiations last year, Sen. Pat Toomey (R-Pa.) put forward a plan to lower rates, raise revenue and limit deductions. Sen. Rob Portman (R-Ohio) has a revenue-neutral corporate tax reform plan that lowers the rate to 25 percent and moves to a territorial system.

On the spending side, “soak the rich” by getting rid of the billions of dollars in government benefits, taxpayer subsidies and corporate welfare the wealthy receive each year and don’t need, and by means-testing government programs from unemployment benefits to farm subsidies.

On entitlements, put forward a plan to save Social Security and Medicare through structural reforms and by reducing benefits for well-off retirees and eliminating them entirely for the wealthiest seniors. Propose a “Buffett Rule” of your own: Warren Buffett does not need taxpayers to subsidize his retirement and health care.

STEP THREE: Pass your plans. If the president refuses to negotiate and no progress is made by February, inform him that you will attach all or part of your plan to legislation raising the debt limit and pass it in the House. Then do so. Obama will sign it. Here is why:

Unlike with the fiscal cliff, Republicans have all the leverage when it comes to the debt limit. Today, Obama is perfectly willing to go over the fiscal cliff and blame the GOP for the resulting tax increases on the middle class. But when it comes to the debt limit, he does not have that luxury. He can’t default on our debt — the consequences are too catastrophic. So in the end he will cave.
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There is more.

The plan could work, although they would encounter significant media head winds in the process.  They would need to go on the attack and be relentless.  They also need to break the tax cuts down into two parts.  The first part would be the so called middle class tax cuts.  The second part would be for the people making over $250,000.  For that group the new rates would only apply to those who do not have employees in a small business.  Democrats might reject this one, but it should still be attached to the debt limit bill which would then be passed.  At this point that is the Republicans best alternative to a negotiated agreement on Obama's terms.

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