By WSJ, Editorial
In case you missed it, President Obama held a press conference Monday to make essentially two points: He won’t negotiate with Republicans over raising the federal debt limit, and if Republicans want any spending cuts at any time in the next four years they’ll have to raise taxes along with it. He won, so get used to it, chumps.
We’ll elaborate on the debt-ceiling fight another day, but let’s focus today on the President’s demand to raise taxes—again. Millions of Americans, rich and middle class, are still recovering from the shock of the income and payroll tax hikes in their first 2013 paychecks, while ObamaCare’s new taxes have also just kicked in. These are the biggest tax increases in at least 20 years, yet Mr. Obama is already stumping for another revenue raid.
The President even invoked the American people to support his third huge tax hike, saying Monday that “They don’t think it’s smart to protect endless corporate loopholes and tax breaks for the wealthiest Americans rather than rebuild our roads and our schools . . .” You already know the rest.
But wait. It was President Obama who insisted that the recent tax bill be loaded with tens of billions of dollars worth of additional “corporate loopholes,” including for his billionaire buddies in the green-energy business. Too bad no one in the White House press corps asked about that contradiction. Maybe next Presidency.
The big fiscal news here is that Mr. Obama and the Democrats are all but conceding that the recent tax hike is little more than a token reduction in the deficit. The tax hike, while the biggest in 20 years, will raise only $620 billion at most over 10 years, and probably less. Yet Mr. Obama conceded in passing Monday that the debt ceiling will have to rise by something like $1.25 trillion to accommodate this year’s deficit alone.
Other Democrats are also bellying up again to the tax bar:
• Nancy Pelosi declared on January 6 on CBS’s “Face the Nation” that the fiscal-cliff deal was “not enough on the revenue side.” While declaring herself “fairly agnostic” on where the money will come from, she suggested closing tax loopholes and raising $38 billion by ending “special subsidies for big oil” that are merely the same as all manufacturing companies receive.
• Michigan’s Sandy Levin, the ranking Democrat on the Ways and Means Committee, recently reassured his liberal colleagues on the House floor that “additional revenues” are sure to come in future budget deals and that “this [tax hike] sets that important precedent.”
• Richard Durbin of Illinois, the number two Democrat in the Senate, was asked on January 6 on CNN whether there should be more taxes on the wealthy and he responded: “Absolutely.” He explained that tax loopholes should be closed because “We forgo about $1.2 trillion a year in the tax code, money that otherwise would go to the government,” as if it all belongs to Uncle Sam in the first place.
Mr. Durbin then said that even that isn’t enough and we “should have energy taxes that really fund infrastructure investment,” including a gas tax increase. Give Mr. Durbin credit for candor for saying what nearly all of his fellow Democrats really believe, which is that income taxes alone won’t fund the government they want.
Liberal commentators who aren’t running for office are even more forthright. Former Vermont Governor and Democratic Party Chairman Howard Dean conceded in December on MSNBC that “this may seem like heresy” but “the truth is, everybody needs to pay more taxes, not just the rich.” The Obama tax proposal to tax the rich was “a good start,” he added, “but we’re not gonna get out of this deficit problem unless we raise taxes across the board.”
He’s right about soaking the rich. Even if they taxed 100% of every dollar earned by every American who earned more than $500,000 in 2010, the feds would take in $1.29 trillion, or not much more than the entire 2012 deficit.
More and more liberals are picking up this theme and admitting that the middle class has to be taxed because that’s where the money is. One Democratic newspaper recently suggested that Mr. Obama consider taxing “capital gains at the same rates as ordinary income” (which would be a 40% capital-gains rate, up from 23.8% now and 15% in December), “surcharges on multimillion-dollar incomes, and higher corporate taxes,” plus “exploring carbon taxes . . . a value-added tax . . . and a financial transactions tax.” Is that all?
Republican leaders Mitch McConnell and John Boehner have ruled out any such tax increases, at least outside of a tax reform that also cuts tax rates. But they and other Republicans should note that having agreed to raise tax rates once hasn’t assuaged Democratic tax ambitions or won them any fiscal respite. It has merely whetted the Democratic appetite for more.
Once upon a time, the Democratic political strategy was “tax, spend and elect.” Mr. Obama has turned that strategy into spend, borrow, elect and tax. And then tax some more. Republicans had better start educating the public about this, or they’ll end up having to raise taxes again.
A version of this article appeared January 14, 2013, on The Wall Street Journal, with the headline: The Next Tax Increase.