He would pay for all of this with higher — much higher — taxes. He would, of course, allow the Bush tax cuts to expire in 2010. But that’s just the beginning. Obama also has called for removing the cap on Social Security payroll tax, a $1.3 trillion tax hike over the first five years. And, at a time when the U.S. economy is slowing down, Obama would significantly increase taxes on business, investment and job creation, including nearly doubling taxes on capital gains. Americans would face some of the highest marginal tax rates in the world.
Health care: A President Obama would take America down the road to a government‐run health care system. He supports a concept known as “managed competition” under which insurance would remain privately owned, but would operate in an artificial marketplace with strict government regulation, much like a public utility. The government would determine what types of benefits you would be required to purchase and how much insurers could charge. Young and healthy people would have to pay more than they ought to in order to subsidize premiums for older, sicker individuals.
While he would not actually mandate that individuals buy health insurance — a point of contention with Hillary Clinton — Obama would mandate that all employers provide their workers with insurance. That proposal would almost certainly end up hurting workers. An employer is indifferent as to whether compensation comes in the form of wages, taxes, health insurance or other benefits. Employers will therefore have to find ways to offset the added costs. This they can do by raising prices, lowering wages or reducing future wage increases, reducing other benefits such as pensions, or hiring fewer workers. As always, employees will be the net losers, with the low‐skilled suffering most.
Regulation: A health care mandate is not the only new regulation that Obama wants to impose. For example, he would require businesses to pay an undefined “living wage.” He would require paid “family and medical leave.” He would regulate mortgages and credit card interest rates. He would impose a host of environmental and labor restrictions. The net cost of this regulatory burden almost certainly will be higher unemployment and greater poverty.
And it’s not just businesses that would feel the regulatory hand of an Obama presidency. Consumers too will have to pay, as he imposes new costs on products ranging from homes to automobiles and appliances. In almost everything we do, Obama sees a need for the government to intervene.
A President Obama would mean a much bigger, more intrusive, and costlier government. Indeed, when considering his policies, one searches in vain for any break with liberal orthodoxy. Personal accounts for Social Security? Entitlement reform? School choice? Obama rejects them all, calling such proposals, “Social Darwinism.”
That’s a lot less inspiring than Obama the candidate.