The American Spectator : Breaking Faith

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Breaking Faith

By Peter Ferrara on 2.24.10 @ 6:07AM

President Obama's tax-raising plans have passed the point of no return. So much for his pledge not to raise taxes on working people.

"I can make a firm pledge. Under my plan, 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." That is what Barack Obama promised the American people when he was asking for our votes during his 2008 election campaign. Not just this one time, but over and over throughout the campaign. You could ask Joe the Plumber.

Truly, this pledge was the centerpiece of his 2008 election success. I remember during one Presidential debate, Obama hotly disputed McCain's charge that Obama would run up spending so much that he would inevitably bury voters with tax increases. Obama responded by reiterating the above no tax increase pledge, and insisted further that for those making less than $200,000 per year, "your taxes will go down," emphasizing the point with a downward sweeping motion of his arm.

But after only one year in office, in a shocking Business Week interview on February 9, President Obama cavalierly dismissed these core campaign pledges. In response to a question asking, "If your deficit commission comes back and says we would recommend raising taxes on households earning less than $250,000 a year, would you accept that as part of a larger deal?" President Obama said,

"I don't want to prejudge the commission because the whole point of it is to make sure that all ideas are on the table, and let's see what folks can come up with. What I want to do is to be completely agnostic in terms of solutions."

Looks to me like President Obama owes John McCain an apology. If Obama was being honest back during that 2008 debate, he would have responded to McCain's tax increase charge by saying what he said on February 9, that "I want to make sure that all ideas are on the table, and let's see what folks can come up with," and that he was "completely agnostic" regarding a tax increase on working people.

After all, it is not like America's overwhelming long-term deficit problem is a new surprise to Obama. He knew perfectly well back in 2008 what he also told Business Week on February 9: "[T]he fact of the matter is that we have a structural deficit that is in place that was there before the recession…And that is going to require some big, tough choices that, so far, the political system has been unable to deal with."

Included in that political system unable to deal with those necessary big, tough choices is President Obama, who greatly exacerbated the deficit problem with his nearly $1 trillion, failed "stimulus" package just a year ago, followed just a few weeks later by the $400 billion omnibus spending bill, followed by his budget providing for an 18% increase in total federal spending in just one year, and for a one-third increase in federal welfare spending over two years. After those big, tough choices, with the "stimulus" money mostly flowing in this election year to try to buy votes, President Obama is now "agnostic" on tax increases on working people. Isn't this exactly what John McCain said would happen?

And while Obama is issuing apologies, he should also apologize to Senator McCain for his less than honest mischaracterization of McCain's proposal to extend tax credits for the purchase of health insurance to everyone, which Obama indignantly denounced as involving unprecedented taxation of employee health insurance. Such taxation is exactly what President Obama has now proposed in his government health care takeover plan earlier this week, also in violation of his pledge of no tax increases on working people.

The Presidential Commission to Raise Your Taxes

"The whole point" of President Obama's Commission is precisely to obtain political cover to abandon his central 2008 campaign pledge not to raise taxes on working people. He can then say that it wasn't his idea. The "experts" on the Commission made him do it, right after he says the tax increase is actually really Bush's fault.

None of the rest of us should let him get away with that garbage. If President Obama endorses a Commission proposal to raise taxes on working people in violation of his campaign pledge, I will be persistently pestering conservative, free market, and Republican leaders to join me in calling on him to resign. It is just too much of an abuse of voters and our democracy for a candidate to run for President promising so centrally to cut, rather than increase, taxes on working people, sneering at anyone who suggests anything to the contrary, and then to lead a crusade to do just the opposite once elected. If President Obama believes what he said in that Business Week interview, then he should have to resign and run again on what he actually believes, to maintain the basic integrity of our democracy.

Obama further clarifies the tax increase intent behind the Commission in saying, as quoted by the New York Post on February 12, "The notion that somehow we can just cut our way out of this problem is not true." Translation: he has already decided to break his pledge with a wicked tax increase. What is likely coming is a proposal for a Value Added Tax (VAT) as is widespread in Europe, where the tax is incorporated in the price of everything you buy. Far Left House Speaker Nancy Pelosi has already endorsed that barnburner burden on working people. They know that between the Obama/Democrat budget and the health takeover bill they are already trying to squeeze more out of "the rich" than they can get.

The intent behind the Commission is further revealed by the Washington establishment figures President Obama appointed to head it, former Clinton White House insider Erskine Bowles, and retired Senator Alan Simpson, author of the failed 1986 immigration amnesty plan. Transparently, they will follow the shopworn establishment methodology for balancing the budget, which never works, and has no prayer of ever working.

That is for a convocation of wise, establishment, graybeards like the Commission to solemnly bargain over competing lists of spending cuts and tax increases, and come to some deal. The tax increases are then adopted permanently. But the spending cuts are never adopted, or if they are they are soon swept away in the next liberal budget.

Then the tax increases don't raise the revenue expected, because no one in establishment Washington can imagine that tax increases have negative incentive effects that reduce the expected revenue increases. So the deficit reappears, and continues until the voters can be fooled by the whole charade again. We have seen this over and over at the state level, as well as at the federal level.

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About the Author

Peter Ferrara is Senior Fellow at the Carleson Center for Public Policy, Director of Entitlement and Budget Policy for the Heartland Institute, and General Counsel of the American Civil Rights Union. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under the first President Bush. He is the author of America’s Ticking Bankruptcy Bomb, now available from HarperCollins.

Letter to the Editor View all comments (37) | Leave a comment

mstahl| 2.24.10 @ 7:14AM

If you make more than 100k your taxes go up every year as the cap on SS wages goes up. That was true before Obie made his pledge. So, he was lying right from the get go. Most of Mr. Ferrara's ideas make sense but those in power have a breathtaking disdain for the idea of fiscal responsibility. BTW the Clinton administration did not run surpluses. This is one shibboleth that must be countered. They counted the SS revenue as general revenues when doing deficit calculations. I get a little tired of hearing people say "we had a surplus during the Clinton years". It is all on the OMB website, "you can look it up".

Ferrara| 2.25.10 @ 2:18AM

We have high expectations for Obama !

I do not think he would be smarter than any other term of the President

http://www.udtek.com/lcd-charger-c-4.html

Bram| 2.24.10 @ 7:37AM

He always intended to let the Bush tax cuts expire - so he was lying all along.

I was openly laughing in the face of co-workers who believed Obama's tax lies.

Jim O'Brien| 2.24.10 @ 7:56AM

Send more donations to Joe Wilson (R-SC). He called Obama a liar on the floor of Congress.

The way to get the economy moving again is to eliminate the federal income tax system and the IRS. Legislation has been introduced in both the House and the Senate to do just that. It's called the Fair Tax (www.fairtax.org). It would mean no corporate or personal income tax, no capital gains tax, no estate tax, no taxes withheld from paychecks, no taxes on dividends or interest, no IRA or Roth issues, and no need for the country to spend some $300 billion a year just to comply with more than 50,000 pages of IRS regulations. The Fair Tax is a sales tax which would be collected via existing state mechanisms. It is a tax on consumption, in contrast to the existing system, which taxes productivity. Anyone who wants to buy things must pay it, even the millions of illegal immigrants living here.

On the Fair Tax website, you can find out if your congressman supports it, or not. It would result in unprecedented economic growth, making the U.S. a magnet for capital.

Copyleft| 2.24.10 @ 8:15AM

The Unfair Tax is, of course, a scam. It relies on the well-known ignorance of the American public when it comes to economic matters, and appeals to their craving for "easy answers" that sound good until you explore their actual consequences.

Make no mistake, the rich would be DELIGHTED to see the Unfair Tax put into place--it would do an excellent job of further redistributing wealth away from the working class and into the pockets of the wealthy.

But its primary value is as a propaganda tool, urging the ignorant base to vote against their own interests and in favor of corporate oligarchs. For the GOP, that's business as usual.

JP| 2.24.10 @ 8:34AM

"Make no mistake, the rich would be DELIGHTED to see the Unfair Tax put into place--it would do an excellent job of further redistributing wealth away from the working class and into the pockets of the wealthy>"

CopyLeft,
About 70% of those earning $65,000 or less pay no income tax. Anyone earning $300,000 or more pay over 40% in taxes and fees to local, state and federal governments. People earning more than a million a year pay almost half of thier earnings to various forms of government. I remember Michael Jordan saying in 1996 that his Medicare withholdings alone were over $3 million (taken from his annual earnings of $35 million). To say that wealth is being redistributed from the "working poor" to the wealthy is asinine.

Tom| 2.24.10 @ 8:50AM

Jordan lied. Or you misremembered. Medicaire tax rates for employees is 1.45%. I do not know what it was in 96 but I would wager it was not 8.6%.

Still an insane amount of money though...

Tim| 2.24.10 @ 9:20AM

Copy, really, the Democrats and the Republicans couldn't drop trou and jump in the bailout bed fast enough to save their big, stupid, bankrupt banker friends. It is emphatically not a left-right issue. George Bush, John McCain, Barrack Obama all, ALL lined up to sign government checks for Goldman Sachs and friends.

Copyleft| 2.24.10 @ 9:54AM

Now, THAT I'll agree with. Every critter in Congress is beholden to the special-interest money first and foremost, party and country be damned.

Ryan| 2.24.10 @ 1:02PM

How would the wealthy get around paying the Fairtax if it was implemented?

Copyleft| 2.24.10 @ 1:04PM

I never said they would. I said they would benefit from it disproportionately, through the elimination of non-consumption taxes that enable us to have a fair and progressive tax structure.

Ryan| 2.24.10 @ 3:06PM

So what? So what if they benefit disproportionately - does that necessarily make it unjust? If they earn more, but pay taxes, and the government is funded properly, what does it matter?

MikeBee| 2.24.10 @ 4:07PM

Those who pay the bulk of taxes now SHOULD receive a break, if taxes are lowered in any way. Today, the wealthy pay far more in taxes than do the working class. What really needs to be done today is the complete elimination of corporate income taxation, for an extended period. This, combined with the weak dollar today, would create massive foreign investment in the U.S., strengthening our economy, and creating jobs. The foreign investment and jobs created would, in turn, increase revenues for the federal government.

Jeff Perren| 2.26.10 @ 4:06PM

"non-consumption taxes that enable us to have a fair and progressive tax structure. "

This is the root of your error - and an indication of why your entire political philosophy is wrong. There is nothing fair about progressive taxation; conversely, there is nothing unfair about allowing an individual to keep what he has earned. Nor is it moral to ask the government - particularly the Federal government - to act as your proxy to steal from Peter to give to Paul.

To address a relatively minor reasoning error, a flat tax still takes proportionately according to income. Those who make more still pay more, when loopholes are closed.

That aside, the only fair income tax is NO income tax - for anyone. Cut spending enough to make that possible and 90% of our domestic troubles will disappear within five years.
Of course, that would leave a lot of social engineers with little to do. Well, there's always a downside to every plan.

Bostonian| 2.24.10 @ 8:28AM

Mr. Ferrara is correct about Obama's dishonesty and the need to cut spending, but he is unrealistic about broad-based tax cuts raising revenue. The Laffer curve does exist, but at current tax rates, reducing tax rates DOES reduce revenue, although by only about half as a "static" analysis would predict. (Source: "The 'Laffer Curve' Renamed", by Alan Reynolds:
http://www.cato.org/pub_display.php?pub_id=6432 )

Darin| 2.24.10 @ 8:36AM

Obama lied.
My income died.

Melvin| 2.24.10 @ 8:44AM

For a Constitutional lawyer/politician, lying is more of a tool than than a attachment to the politicians conscience.
If it takes lying to the American idiot public then so be it, because they are not smart enough to figure out that I am lying to them. And if they did who cares they have short attention spans anyway.
Another aspect to this is lying is so pervasive and acceptable in the new American mentality that it almost a contest to see who is the better liar.
A freshman college student was asked during one interview, "Do you feel that cheating on college exams is perfectly acceptable?" The student replied, "Absolutely, what ever it takes to get that degree, if that means cheating, then it's OK."
You see, the student has already fabricated himself and out because as long as cheating, lying, and or stealing is used to get his degree then it is perfectly acceptable.
This is technique is what Obama is using, he'll lie is rear-end off in order to advance his agenda, because he as the student did, fabricated himself an out. but if some-else lies, cheats or steals preferably from the opposing political party then that is bad.
Bill Clinton got on National TV and lied to us straightaway and America some much didn't raise an eyebrow.

Richard Baker| 2.24.10 @ 9:25AM

And we should be surprised when a man whose friends were all Socialists/Marxists/Communists lies? Lenin said that "treaties are like pie crusts, made to be broken." When the Patron Saint ridicules honesty and commitments should we be surprised when the present occupant of 1600 Pennsylvania does the same?

davelnaf| 2.24.10 @ 9:26AM

Stop complaining about the Chosen One's methods. He knows what he is doing even if the rest of us don't.

Al Adab| 2.24.10 @ 3:02PM

Dave,
Of course we should all shut up and follow the lead of our betters. After all the idiots who thought up this self government idea were just a bunch of old guys.

Just a question though, who decides which of our "betters" we follow?

Richard Baker| 2.24.10 @ 9:35AM

davelnaf:
Ah, but we do know what he's doing. Sic Semper Tyrannis.

Tony in Central PA| 2.24.10 @ 10:14AM

Obama has a consistently rigid, ideological M.O. : tell everybody whatever he thinks they want to hear when convenient, then in matters of policy, further empower, enlarge and centralize the government. History will show that this particular President, House and Senate to have been the worst combination possible for our nation's fiscal challenges.
Republicans have been derided as the " party of bad ideas " and the Democrats as " the party of bad ideas ". I would now amend the Democrat description to " the party of one bad idea ".

Tony in Central PA| 2.24.10 @ 10:17AM

I flubbed, I meant to write the GOP was derided as " the party of no ideas ".

Mattled| 2.24.10 @ 10:33AM

Tony---when you wrote about Obama's M.O., I for a moment thought you were writing about Moochelle.

How many people thought her "Let's Move" program was them leaving the White House? (Cue The Jefferson's music)

Tony in Central PA| 2.24.10 @ 10:53AM

" Let's Move " ? By all means. Retiring Michelle alone should put a sizable dent in the deficit.

coal carrier| 2.24.10 @ 10:51AM

The progressives lie to our faces. Obama is no different. Then they turn around and hire high priced lawyers and CPA’s to hide their money from the socialist government that they promote, defined and perpetuate. Including Striesand, De Niro, Clooney, Biden, Pelosey and Soros. Just to name a few.

Oldefarte| 2.24.10 @ 10:58AM

Peter, great ideas MOST, but I'll offer alternatives. Due to the current budget deficit and national debt, forgo tax cuts for now, and instead substantially CUT EXPENSES of the government. Foreign aid has no useful purpose, and only ends up in the pocket of some dictator on his way to a Swiss bank. Farm aid to most large wealthy farmers should be eliminated, as the crop prices should sufficiently provide their income. The space program should be reduced to UNMANNED flights only [for strictly scientific purposes]. Welfare should be reduced and redesigned into workfare [recipients should be required to work for local governments at various menial labor (ie street cleaning, farm labor, governmental building cleaning,etc)]. Military purchases should not be for exorbatant equipment/hardware that is wasteful [ie,supersonic jets when our enemy is Muslim extremists with roadside bombs and rifles];etc. Medicare should not be excluded based on 'means testing'-----recipients have PAID FOR this Medicare through their lifelong SS taxes paid. Medicare should be remedied through tort reform, interstate insurance purchases, medical industries cost reductions,etc [not means testing]. Medicaid should be entirely eliminated, and instead governmental hospitals [staffed by medical interns and government paid physicians]should be established throughout the country. Privatization of SS accounts would be a mistake, as some people simply are not educationally qualified to direct/invest their monies. Instead SS's salary limit should be eliminated, thereby substantially increasing its revenues. Workers should be given the option of opting out of SS at the beginning of their work career, and at retirement, be excluded from SS coverage. Otherwise, I agree with your excellent thesis!!!!

Ed| 2.24.10 @ 12:37PM

In the original Star Trek series, Captain Kirk would befuddle a sentient supercomputer system with something like the following syllogism:

"All Obamas are liars. I am Obama."

And the poor computer would devolve into a gibbering, catatonic state.

(A tip of the hat to Jonah Goldberg)

Larry in Iowa| 2.24.10 @ 12:37PM

Sounds like a "Read My Lips" situation to me. The question is, will Republicans do to Obama what Democrats did to GHW Bush?

Al Adab| 2.24.10 @ 1:12PM

This type of dissembling is oh so typical of the Domocrat/Left. When they refer to taxes the "mean" only income or direct taxes. To them Fees, costs. regulatory imposts and the like are not taxes. Yet, to small business the costs imposed are becoming prohibitive. Should "health care" imposts and requirements emerge, the overall cost to business will be enough to drive them into extinction. Many doctors will quit and many small businesses will disapear. So much for economic recovery.

WRJonas| 2.24.10 @ 4:52PM

I agree whole heartedly with Larry in Iowa. For all of the Republican Glenn Beck types out there gargling with the No Difference Between the Parties mouthwash, consider the consequences of George Bush' "Read my lips" remark and Obamas " no taxes on those earning under $250k "
The lying lefty gets a pass from the MSM and GWB gets clobbered instantly the moment he signed the legislation. In fact , those who were urging him to accept the bill began attacking him the day after he okayed it. The left has only one mode ,,Attack Republicans .

Bill| 2.24.10 @ 7:40PM

Obama Sucks!

Radioman777| 2.25.10 @ 1:22AM

Anybody stupid enough to believe that he actually intended to keep this, or any other, campaign promise needs to check into the nearest mental hospital to have their delusional selves cured. He never intended to keep any promise he made while campaigning, or at any other time. Mr. Obama is, to put it bluntly, a LIAR. He's always been a liar and always will be. I believe he's pathologically incapable of telling the truth about anything.

Doubt me? Just how much do you actually know about him based on any information he's provided?

Jeffrey| 2.25.10 @ 2:02AM

Obama; born to a liar, educated by a liar, pastored by a liar, friends with liars, married to a liar and the liar just can't stop lying because; he is a liar.

Dein| 2.25.10 @ 7:32PM

Joe Wilson would need treatment for hoarseness if he had attended THE GREAT SUMMIT

Jack Kinch(1uncle)| 2.28.10 @ 4:05PM

Before No Lie Nobama is through, a lot more people will want the government to do something. SAD.

Orphe D| 3.1.10 @ 9:40AM

Would you care to view the video and comment on your blog? I am very interested in what you have to say. Your opinion matters! Thank you.
http://www.freedomandprosperit.....e1-3.shtml