No amount of tax increase will prevent entitlements from bankrupting the country.
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There are many factors figuring into the various economic data, but the data show somewhat lower GDP growth and much higher unemployment correlating with the IMF’s suggested higher tax rates. And that’s because — let me put on my big surprise face — people do change their behavior when tax rates rise.
It bears mentioning that I said that there is no amount of tax increase that will keep entitlements from bankrupting America. Weigel says that the IMF report proves I’m wrong. But the IMF report calls for a 35% increase in tax revenue and still requires 35% cuts in entitlements to achieve “fiscal balance.” So Weigel is actually proving my point. There is no actually achievable tax increase that can save the nation from bankruptcy-by-redistribution without massive reductions in entitlement spending.
Beyond that, the IMF’s revenue assumptions are ridiculous. Yes, it is possible to extract much more tax revenue from an economy (though not without a VAT or national sales tax), but not without harming the citizens who have to live and work in that society through weaker growth and higher unemployment. Increasing revenue by 35% will require increasing tax rates substantially and introducing a crippling and impoverishing national sales tax.
Weigel completely fails to address my argument that tax hikes to fund bloating entitlement liabilities rest on a “fundamentally Marxist premise…the same premise a mugger might use to redistribute your income.” At the end of the day, ideas matter and I found it informative that Weigel refused to engage on that most basic idea about the proper role of government in America.
He then says that my point about the French opposing tax hikes and favoring spending cuts is irrelevant because French tax rates are already higher than ours. So what is his implication? That our government should raise taxes until tax hikes are as unpopular here as they are in France?
It is true that polls in the U.S. show less opposition to tax increases than the polls in France, but that’s in large part because almost half of the U.S. pays zero or nearly zero income tax. So you would expect half of the respondents in a poll to favor taking more of other people’s money… and they do just that.
If we had a national sales tax, however, which is the only way to get where the left wants to go in terms of tax revenue as a share of GDP, you can bet that the poll results would change dramatically when a question of raising a tax rate that impacts everyone were to arise. Indeed, a recent blog by Casey Mulligan at the NY Times shows that those in the lower end of the earnings scale in France pay far more of their income (in percentage terms) in taxes than do “poor” Americans. (Mulligan’s detailed discussion on the topic is an interesting read.) This makes perfect sense because despite the cries by Obama and friends to soak the rich, it is impossible to balance a bloated federal budget that way. The government has to reach into the pockets of the middle and lower economic classes — which is exactly what France does — and even then because of the nature of politicians, they will still run large budget deficits.
If my arguments were a strawman as David Weigel suggested, he should have easily been able to demolish them. Instead, he makes barely relevant points which strengthen my statement that tax increases cannot keep entitlements from bankrupting our nation while he neglects to touch the fundamental question of whether it is OK for government to play Robin Hood who, despite claims of righteous motives, was still a thief.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
Was the President done in by the economy, or by the politics of the economy?