A Liberal Writer Admits: Obama Will Jack Up Taxes on the Middle Class in His Second Term

Call it the opposite of the "starve the beast" plan attributed to Reagan, in which taxes were cut down in order to restrain the growth of the government -- raising taxes to pay for new government programs would be politically unpalatable.

Obama's plan? Gorge the beast so it becomes so fat that unless we feed it more it will die. And once his "down payments" on budget busting future programs are in place, he hopes that they'll be so popular that cutting them will be politically impossible, and hence the public will support the "next-worst" solution of jacking up taxes.

Not sure whether or not you actually need to read this pap -- the liberal writer spends most of his time telling us how remarkably candid Obama is, even while lying through his teeth, apparently, and justifies his continuing lies as effective politics.

In a less-friendly analysis of Obama's budget-busting ways, Clive Cook says that a European style Value Added Tax is coming.

Even before the rise in top marginal rates promised by Mr Obama, the US income tax collects 45 per cent of its revenues from the highest-income decile. Compare that with Britain at 39 per cent, Canada at 36 per cent, France at 28 per cent, Sweden at 27 per cent and an OECD average of 32 per cent.

This difference is only partly explained by the less-equal US income distribution. The fact that the US has no broadly based national sales tax – value added taxes make Europe’s overall tax codes less progressive still – only underlines the point. The US tax system raises comparatively little revenue; what little it raises already comes disproportionately, by international standards, from the rich.

I have previously argued that the US will need a VAT. Even before Mr Obama unveiled his ambitions for healthcare reform, wage subsidies to help the working poor, better education and the rest, the US middle class was seriously under-taxed. The government’s promises, on present plans, will be unaffordable. If they are honoured regardless, the only question is which comes first: broadly based tax increases or fiscal collapse. Welcome home, Mr President.

There is a dirty little secret about taxes -- a government must tax the middle class to get any meaningful increase in revenue. Simply because there are so many middle-class taxpayers and comparatively few rich ones. As Willie Sutton said of banks, the government goes after the middle class because that's where the money is.

And the middle class is being lied to left and right by Obama, convinced, at the moment, that it can have all these hugely expensive new programs without any of the costs falling on their shoulders. That's a lie and it always has been.

The question is whether the middle class will revolt when the bill comes due, or if Obama will have by then convinced them that paying ever-higher taxes is patriotic.

posted by Ace at 08:14 PM

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