“Why the Obama tax hikes have only just begun”
Far be it for me to correct the estimable Jim Pethokoukis. But doesn’t he mean the “bi-partisan, fiscal-cliff avoiding, what’s best and most prudent given the circumstances, and god bless us all for being so prudent and avoiding the hectoring of naive, un-nuanced fringe teabagging extremists” tax hikes?
Small correction, but an important one. Please, Jim. Proceed:
How much more “balance” does Obama want?
1. Well, the fiscal cliff deal is a $620 billion tax hike, according to the Congressional Budget Office. Obama’s original offer to House Speaker John Boehner called for $1.6 trillion in tax hikes, including a) $960 billion in higher tax rates and higher taxes on investment income along with b) $600 billion in additional taxes, such as limiting tax breaks for wealthier Americans.
2. In a November policy memo, White House economists thought a tax hike of around $500 billion was doable via broadening the tax base.
3. Also recall that the president’s 2013 budget called for a $300 billion corporate tax hike.
So adding it all up, it would seem the president’s second term goal is for roughly $2 trillion in new taxes. We’re only one-third of the way there.
But what leverage will Obama have to make good on his tax-hike threats? As The Wall Street Journal editorial page notes today, “The President has had unusual leverage over Republicans because he just won re-election and because taxes were going to go up even if they did nothing.”
One potential Obama bargaining chip is the sequester, particularly the $500 billion in defense cuts that many GOPers loathe. So perhaps Obama can offer to turn off the defense cuts in exchange for $500 billion from limiting tax breaks for the rich. And then maybe another $300 billion in corporate tax hikes for agreeing to change how Social Security benefits are calculated. Many scenarios are possible. What’s for sure is that the Obama desires vastly higher taxes to pay for his expanded welfare state. Desires and needs them. And it’s now Democrat economic theology that tax rates could return to pre-Reagan levels without hurting growth.
Tax hikes? Obama is only just getting started.
Fortunately for him, he has his “Obama tax cuts for the middle class” to fall back on to show how much he’s willing to protect the working man. So the GOP’s failure to accept whatever “balanced plan” (what’s in it won’t ever be discussed; in a post-modern American, just calling it “balanced” then repeating that forces the GOP to decide, publicly: are you for or against “balance” — and honestly, what kind of extremist is against balance, or compromise for that matter?) Obama comes up with next to raise taxes, increase spending, and further hasten us toward the now inevitable collapse of the dollar and the economy, will once again place the blame directly on them.
After all, Obama stands for a balanced approach — and the GOP just admitted that he offered them one by passing his tax hike (with no cuts in spending). So why the sudden recidivism into unbalanced obstructionism, the media might query.
To which the answer will be: you know, they’re right! We must surrender here, because why give up whatever’s left of our political capital?
They must be holding that capital in gold, is all I can figure.