The Right Opinion

Taxman to Middle Class: 'Bend Over'

By Larry Elder · Dec. 13, 2012

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.



rab in jo,mo said:

Keynesian Economics = FAIL!

At some point, you will always run out of "other people's money". Always. But until there is a massive tax revolt, or a group of States decide they no longer want to play according to the Fed's rules, nothing will change.

Thursday, December 13, 2012 at 8:30 AM

Rod in USA said:

Excellent as always, Larry. You are totally on point!

With a deficit of 120B in October and a whopping 172B in NOV, we are tracking for a RECORD $1.752 TRILLION deficit. In any household, you would be insane to spend 50% more that what you take in for four years, let alone more.

To continue that example: For a family that earns $50,000 a year, after four years, they would have added to their debt a total of $100,000 on their credit card. The interest would consume them, as it will our national GDP.

When are we going to start *paying off the mortgage* on the childrens' future?

Watch this video: Google "Eat the Rich video" if the link fails.

Cost of the wars? I know you cannot trust Wikipedia to be 100% accurate or non-biased, but start here:

The bottom line on cost is that you cannot be hypocritical: If you are going to count future estimatred veteran health care costs through 2050, as stated in the link, then you have to also cost out the future costs of interest on trillion dollar deficit spending and handouts and entitlement programs, as well as wasteful spending on crony capitalism ventures like Solyndra, Ener1 etc etc etc.

The TRUE cost of the wars would be to measure:
1. Reserve and Guard salaries and benefits during the mob period only, less the cash they would earn if they had stayed in Reserve duty status
2. The cost of transporting troops and equipment to and from the combat zones throughout the conflict
3. The direct costs incurred for fuel, ammunition and supplies expended.
4. The direct costs for projects completed to "rebuild" the nations and their governing capcities.

You should NOT include Active duty Soldier salaries (they would be paid anyway), or any other cost that would have been incurred anyway.

The best rough order of magnitude for these costs is the Supplemental appropriations. That totals roughly $1 trillion, but has some non-war costs mixed in. On average, that would be about $100 billion a year, which is only about a 5% increase over what the government had already been spending. So you cannot blame the wars for the current $16+ TRILLION deficit.

Political spin-doctoring, race baiting and class-warfare will not fix the issue and the longer we wait the worse the medicine will be.

Thursday, December 13, 2012 at 8:39 AM

Rod in USA said:

Memo to Libs:

Constitutional Governance and Fiscal Responsibility: ***You're Doing It Wrong.***

Thursday, December 13, 2012 at 8:41 AM

Kevin from Arkansas in USA replied:

Rod: May I add - "You're Doing It Wrong. Just look at Detroit."

Thursday, December 13, 2012 at 9:37 AM

MikeEcho in Orting, WA said:

Mr. Elder, what are your views on a consumption tax, say 10-12%? I could envision the current tax code being reduced to a simple pamphlet. Everyone rich or poor would have some "skin in the game." I would think it would also reduce the cost of goods and services. A consumption tax would, unfortunately, greatly reduce the armies of tax lawyers and other so called specialists in tax collecting. There would be no need for payrol deductions, or complicated forms to fill out. When you buy a jug of milk or a new appliance the tax is collected at the store. This all seems too easy, there must be a catch to it!

Thursday, December 13, 2012 at 12:46 PM

Wayne in Hinesville, GA said:

Until both parties understand that we can't keep spending more than we take in it will never get any better only worse. The entire Federal system is completely out of control. There are 79 different welfare programs, lord knows how many job training programs, programs that oversee other programs, and programs to oversee those programs. A little tongue in cheek I know but I would suspect not far from the truth. The Feds need to go back to only three Cabinet departments, Defense, Treasury, and the State Department. Everything else needs to go back to the states where they belong. Do away with the Federal Reserve, Fannie Mae, and Freddie Mac. Stop all foreign aid to those countries who vote against our interests in the UN and send the UN packing. It would be nice if we had politicians who had the balls to implement these things but I'm afraid its probably too late. But one can wish!

Thursday, December 13, 2012 at 3:08 PM

Tod in Brooklyn, NY said:

Old sarge is absolutely right. Transfer 12 cabinet departments over to the free market, and leave only those 3 you stated. Sorry, Sean Donovan, you'll have to submit your resume to private realty companies! You just might increase your salary their?!

Friday, December 14, 2012 at 7:35 PM

pete in CA said:

I agree with "everybody pays their fair share."

It's the implementation that is all wrong. "Everybody" means EVERYBODY!

That would include the 49% who pay zero taxes (which includes me).

You say, "Then send them a check!" I say, "No way!" The money I would pay in taxes would be wasted by our government. I'll give where I see fit. I'd rather give $1,000 to homeless people in my city and know they got 100% of that money than give our government $100 and know they wasted 80% of it running the government machine, and the people who really needed the help got only 20%.

Saturday, January 5, 2013 at 10:42 AM

P.J. in Lambertville MI` said:

The "middle class" in America are a bunch of followers.They all just sit back and let the greedy rich politicians do whatever they want. They need to vote in middle class people to have a voice. They all vote for the wealthy "paid for and bought by the banks and big corporations". These politicians do not care about America or anybody except how too keep getting more money in their own pockets. You do not have to be a rich lawyer, a golden -spoon fed descendant or a Fotune 500 CEO to run for office. The problem is you have to be rich to buy off all the lobbyists and to pay for your votes. The biggest voting base, and they just keep following.

Monday, January 21, 2013 at 3:47 AM