President Barack Obama in 2008, and again during the 2012 election, promised absolutely, positively no tax hikes on the middle class. The rich, however, must pay more: "It's not me being stubborn, it's not me being partisan -- it's just a matter of math."
How does Obama intend to pay for our cradle-to-grave welfare state? Why, by charging the dastardly “millionaires and billionaires” who “can afford to pay a little bit more.” No more extending the Bush-era tax rates for the rich. To do so, Obama tells us, would “cost” $700 billion -- over 10 years. So this “break” for the rich “costs” $70 billion a year -- or a mere 6 percent of the trillion dollar annual deficits that Obama has rung up since he became president.
This leaves us short about $930 billion per year -- just for the annual deficit, never mind paring down the ever-growing national debt. From where is the shortfall to be made up?
Lots of deluded Obama voters no doubt truly believe “the mess we’re in” is due to “two unpaid for wars and irresponsible tax cuts for the rich.” End the wars and slap the rich with Clinton-era tax rates, and voila, watch the deficit and debt go poof! But with Obama safely re-elected, some Democrats now speak the truth: The middle class, contrary to Obama’s promise, will see substantial tax increases in order to pay for the welfare state the voters once again signed on to by re-electing Obama.
Former Democratic National Committee Chairman Howard Dean, appearing on MSNBC, said: “The only problem is -- and this is, a little, initially going to seem like heresy from a progressive -- the truth is everybody needs to pay more taxes, not just the rich. That’s a good start. But we're not going to get out of this deficit problem unless we raise taxes across the board -- to go back to what Bill Clinton had and his taxes. And if we don't do that, the problem is the pressure is going to be on spending even more.”
Obama, however, still insists that any budget deal include tax rate hikes on the top 2 percent -- a violation of the anti-tax-increase pledge most Capital Hill Republicans signed. He’s winning the argument. Several Republicans now repudiate the pledge.
The “controversial” pledge states that the signer promises to his/her constituents and the American people to: “ONE, oppose any and all efforts to increase the marginal income tax rates for individuals and/or businesses; and TWO, oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates.”
But with post-election polls showing that Americans support raising taxes on the rich, House Speaker John Boehner, R-Ohio, now places “revenue on the table” -- meaning the GOP accepts the election returns as a referendum for a “balanced approach” to dealing with our deficits and debt. By “revenue,” Boehner means closing “loopholes” and “capping deductions” used by “the rich” to pay less in taxes. And more recently, fiscal conservative Sen. Tom Coburn, R-Okla., now says he would accept a hike in tax rates, provided the Democrats present a plan to reform entitlements.
Polls show that if Congress and the President fail to come to a deal to avoid the so-called “fiscal cliff,” Republicans will be blamed. And as the Democrats pin blame, expect their friends in the media to assist with joy and enthusiasm.
The Media Research Center tells us that ABC, NBC and CBS have a distorted view of the term “balance.” After the election, those networks spent way more time on the issue of tax hikes than on the issue of spending cuts. ABC, says MRC, was the worst: “In the three weeks following President Obama’s re-election, ‘World News’ devoted more than 10 minutes, 18 seconds to talk of tax hikes and just 35 seconds to spending cuts (a 17-to-1 margin).” So much for the balanced approach.
But the problem remains how to get rich people to pay for all the things voters want: insurance companies that are forbidden from turning away people with pre-existing illnesses; federal disaster relief; the placing of millions of uninsured on Medicaid; “world-class education”; “investments” in “green jobs of the future”; regulations to combat “climate change”; extending unemployment benefits again; etc.
In 1900, government spending at all three levels -- local, state and federal -- amounted to about 10 percent of national income. Government spending today amounts to 40 percent -- or 50 percent, if one places a dollar value on the unfunded mandates imposed on states and businesses by Washington. The voters re-elected a President who increased the national debt faster and by a greater amount than any previous administration. And there are simply not enough rich folks to pay for it.
Obama, on Nov. 6, won the political argument to continue to expand government. But the election did nothing to change “the math.” Memo to the middle class: Get ready, you’re next.