I confess that I do not fully understand the possible impacts of this giant game of financial chicken that is being played with the debt ceiling, but the insistence on raising taxes further is infuriating and ideologically blind.
We should recall the taxes that have already been raised. As the Wall Street Journal online noted in Taxes Upon Taxes Upon… (June 11, 2011):
• Starting in 2013, the bill (The Health Care Bill) adds an additional 0.9% to the 2.9% Medicare tax for singles who earn more than $200,000 and couples making more than $250,000.
• For first time, the bill also applies Medicare’s 2.9% payroll tax rate to investment income, including dividends, interest income and capital gains. Added to the 0.9% payroll surcharge, that means a 3.8-percentage point tax hike on “the rich.” Oh, and these new taxes aren’t indexed for inflation, so many middle-class families will soon be considered rich and pay the surcharge as their incomes rise past $250,000 due to tax-bracket creep. Remember how the Alternative Minimum Tax was supposed to apply only to a handful of millionaires?
Taxpayer cost over 10 years: $210 billion.
• Also starting in 2013 is a 2.3% excise tax on medical device manufacturers and importers. That’s estimated to raise $20 billion.
• Already underway this year is the new annual fee on “branded” drug makers and importers, which will raise $27 billion.
• Another $15.2 billion will come from raising the floor on allowable medical deductions to 10% of adjusted gross income from 7.5%.
• Starting in 2018, the bill imposes a whopping 40% “excise tax” on high-cost health insurance plans. Though it only applies to two years in the 2010-2019 window of ObamaCare’s original budget score, this tax would still raise $32 billion—and much more in future years.
• And don’t forget a new annual fee on health insurance providers starting in 2014 and estimated to raise $60 billion. This tax, like many others on this list, will be passed along to consumers in higher health-care costs.
There are numerous other new taxes in the bill, all adding up to some $438 billion in new revenue over 10 years. But even that is understated because by 2019 the annual revenue increase is nearly $90 billion, or $900 billion in the 10 years after that. Yet Mr. Obama wants to add another $1 trillion in new taxes on top of this.
And do not exclude the expiration of the Bush Tax Cuts, which is Orwellian speak for tax hikes. To insist on further tax hikes on top of this is pure lunacy. To ignore that we have one of the highest corporate tax rates is blind. Even Bill Clinton noted the need to lower corporate tax rates.
How does one rationally reconcile the thought that the government injecting money into the economy is stimulative but individuals getting to keep and spend more of their own money is not?
The debate between spending cuts and tax hikes is, like all political choices, a false choice. There is a third alternative to raising taxes or cutting spending: growing the economy. Neal Boortz commented that if we grew the economy 5% a year, raised no new taxes and made no further cuts in spending (but did not increase spending) we could resolve the looming deficit issue.
But growing the economy requires reducing government intrusions and regulations that have stifled business growth. It also means delivering tax laws that can be trusted not to change every election cycle.
I don’t care which side of the political spectrum you occupy, adding more taxes to the mass already passed with record unemployment and a very sluggish economy is just reckless and foolish. Focusing this dire dilemma on the proper depreciation of corporate jets and threatening Social Security recipients is partisan political posturing and class warfare at its worst.