President Obama supports higher taxes, but he usually claims he only wants higher tax rates on rich people. Heck, he promised back in 2008 that “no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.”
Obama’s other rhetorical trick is to claim he wants a “balanced approach.” Translated from Washington-speak to English, that means he wants more of our money. But it’s a soothing way to demand more money. After all, who’s against “balance”?
I actually agree with the president—but only if one uses honest math. Needless to say, he wants to use Washington math, where spending increases get redefined as spending cuts if the burden of government spending doesn’t rise as fast as was projected in some artificial baseline.
This is why the budget deals put together by politicians almost always are awful. In order to protect the goodies they hand out to various special interests, the politicians use fake numbers to pretend they’re restraining spending, but when the dust settles, it turns out that the only real result is that taxpayers are forking over more of their hard-earned cash to Washington.
Actually, that statement is incomplete. We need to remember that taxpayers in other nations also get cheated by their politicians. Below the jump is a stunning chart that was shown at yesterday’s Cato Institute conference on “Europe’s Crisis and the Welfare State.” Put together by Veronique de Rugy of the Mercatus Center, it shows that politicians across the Atlantic have imposed €9 of higher taxes for every €1 of spending cuts.
And keep in mind, as Veronique noted in her comments, that many of these so-called spending cuts were merely reductions in planned increases!
This matters because I’m getting increasingly worried that gullible Republicans will get seduced into some sort of budget summit designed to trick them into supporting the Simpson-Bowles tax-hike package.
As I’ve previously explained, this would be a terrible idea. It means a big tax hike, including an increase in the double taxation of income that is saved and invested. It also relies on gimmicks rather than real entitlement reform.
I don’t like higher taxes, but I wouldn’t be completely upset if a tradeoff resulted in some permanent reforms to control the growth of government. But that’s definitely not the case with Simpson-Bowles. And, as Veronique showed, it’s not the case in Europe either.
P.S. It’s rather ironic that the New York Times inadvertently revealed that the only budget deal that worked was the one in 1997 that cut taxes rather than raised taxes.