Things didn’t end all that well for Thelma and Louise, in the
eponymous 1991 Ridley Scott film, as they drove off a cliff in a
desperate effort to evade legal and moral responsibility for having
transformed themselves from non-descript mediocrities into common
criminals. An alarmingly similar political saga, starring Democrats
in Washington, D.C., is playing out today — although, unlike
Thelma and Louise’s crimes, plundering
citizens is, unfortunately, only illegal if you were not
elected to do so.
Given President Obama’s deep love for Hollywood (or at least the
money of its residents), one would think that he would be aware of
the impact, if you will pardon the obvious pun, of driving off a
cliff.
Yet Barack “Louise” Obama along with Senator Patty “Thelma”
Murray (D-WA) seem hell-bent on taking the economic version of that
same road trip, as if they’ve never seen the end of the movie and
aren’t smart enough to figure it out.
In a speech at the
Brookings Institution on Monday, Murray, the second-ranking
Democrat on the do-nothing Senate Budget Committee and Chairwoman
of the Democratic Senatorial Campaign Committee, put her foot on
the accelerator of the Democrats’ doomed joy-ride, saying that her
intent is to prevent any tax rate policy deal in Congress that does
not include raising taxes on the “wealthy.” By wealthy, Thelma and
Louise mean individuals making over $200,000 per year or families
earning over $250,000, a standard that Chuck Schumer (D-NY) and a
handful of electorally vulnerable Senate Democrats dislike,
but one they will go along with when the time comes to cast a
vote.
Raising taxes on the two percent of Americans who already pay
about half of all federal income taxes is what strikes Democrats as
“balanced”: “[I]f we can’t get a good deal — a balanced deal that
calls on the wealthy to pay their fair share — then I will
absolutely continue this debate into 2013, rather than lock in a
long-term deal this year that throws middle-class families under
the bus,” said Thelma.
It takes a particular sort of mind to argue that not raising
taxes on Mrs. Smith represents throwing Mr. Jones under the bus. It
takes a particular sort of mind to claim that the “wealthy” do not
pay their “fair share” when the top one percent of earners pay more
in federal income taxes than do the bottom 90 percent. Read that
again; it is not a typo.
And it takes a charlatan to imply to voters that this tax hike
will have a significant impact on the federal debt and deficit:
Even the White House’s own notoriously optimistic
assumptions anticipate that the additional revenue due to
raising the top two marginal income rates will represent less than
seven percent of the coming decade’s cumulative deficits.
It is unlikely to do even that.
As the Cato Institute’s Dan Mitchell puts it,
“Behind closed doors, Obama’s people must realize that their
class-warfare proposal won’t generate as much revenue as projected.
Surely they are familiar with the
evidence from the 1980s, and they must know that
upper-income people have considerable control over the timing,
level, and composition of their income.” Perhaps Dan, despite
being as cynical about politicians of both parties as anybody I
know, nevertheless gives Democrats too much credit: Part of the
left’s “fatal conceit” is their deep belief that history is
irrelevant against the force of their wills, their wisdom, and
their claims of good intentions.
While noting Thelma Murray’s weasel words, “long-term,” which
would give her a face-saving way to jam on the brakes and accept a
several-month deal to allow the debate to be had during the next
Congress rather than in the lame duck session, it’s safe to say
Democrats are playing a dangerous game. Are the brakes on the
economic automobile, which is speeding toward the fiscal cliff,
strong enough to stop it from going over the edge if Democrats keep
their foot on the gas until the last possible moment?
When repeating his tax-hiking goal recently, Louise Obama said,
“I’m not proposing anything radical here,” but then the definition
of “radical” probably has a different meaning to a disciple of
Jeremiah Wright and Saul Alinsky than it does to most
Americans.
Or does it?
Our elected Thelma and Louise, and other Democratic leaders — a
term I use very loosely — believe that Republicans will feel so
much political pressure from being perceived as defending the
“rich,” will be so bloodied by the slings and arrows of class
warfare, that they will cave.
House and
Senate Republicans, to their credit, show no sign of weakening.
Nevertheless, guided as Democrats are by polls their view is
understandable. In what can best be thought of as a damning
indictment of Americans’ economic literacy, recent surveys by
Rasmussen and
Pew suggest that a plurality of our countrymen support the
soak-the-rich, beggar-thy-neighbor views of Thelma Murray and
Louise Obama, believing that raising taxes on the “rich” would
benefit both the economy and “tax fairness.” Thelma and Louise
economics, however, will do to your job (unless you work in
foreclosures) what the movie characters did to their car.
Republicans make a sound argument about the economic impact of
raising taxes, particularly on job creation. But they haven’t made
the argument frequently or well enough, nor are they addressing the
“fairness” claim, one that fewer Americans would buy into if they
had even the most basic understanding of the true structure of our
tax code.
Unlike the issue of Obamacare, where opinion among Independent
voters is much closer to the views of Republicans than to those of
Democrats, on this issue, Independents — who are, as you are
undoubtedly tired of hearing, the key to winning every major
election in America — fall between members of the two major
parties in their view of the Democrats’ proposed tax hikes.
Unfortunately, and, I repeat, representing an utter failure of
Republicans, the media, and our educational system, Independents
currently think, by more than a 2-to-1 margin, that soaking the
“rich” will make the economy better and the tax system fairer.
The goal for Republicans must be to address this group, giving
them a few bite-size pieces of fundamental information, with more
focus on the economy than on “fairness.” After all, worrying about
fairness is a luxury reserved for those who have a job, or those
limousine liberals who don’t need one.
Regarding fairness, Republicans should make the points that the
two percent of Americans whose taxes Democrats want to raise
already pay the half of federal income taxes and that most
Americans aspire to be in that two percent (or higher); it is
outside the character of most Americans to be jealous of our
neighbors. Furthermore, tax hikes included in Obamacare are already
poised to dramatically impact upper-income earners — as well as
anyone with a pension plan or retirement account that is invested
in individual stocks or stock mutual funds.
Or, to put it in sound bites: Are you so sure that the American
Dream is dead that you’re willing to raise tax rates on
upper-middle class people, as if those rates will never impact you?
And is it fair to raise the rates on those few Americans who
already pay most of the taxes while nearly half of the nation pays
zero federal income tax yet are still protected by our military and
served by the federal government?
But it is regarding the actual economic impact of Democrats’
proposed tax hikes where the GOP must correct Independents’
ignorance and remind voters that Thelma and Louise is not a
romantic story of unappreciated idealism, but rather a tale of
recklessness leading to unnecessary death and destruction.
Even Barack Obama recognized — back
in 2009, when he wasn’t so desperate to run on anything but his
record, because he didn’t have one — that “you don’t raise taxes
during a recession” and that doing so would “put businesses in a
further hole.” Does he now believe that the
weakest “recovery” in modern American history is so different
from a recession, or that we are so safe from the chances of going
into another recession, that raising taxes will actually help the
economy?
Or, to put it in a sound-bite: Even Barack Obama knows that you
don’t raise taxes when the economy is bad. Is your job is safe
enough to risk Obama’s tax hikes?
A new
paper by Drs. Robert Carroll and Gerald Prante of Ernst &
Young finds that the higher marginal tax rates being proposed by
Thelma Murray and Louis Obama combined with the higher taxes
included in Obamacare “result in a smaller economy, fewer jobs,
less investment, and lower wages.”
Highlights of the paper’s findings:
- “Lower individual tax rates were found to increase the
probability of entrepreneurs hiring workers and, for those with
employees, the total amount of a firm’s wages.”
- While the CBO expects the massive tax hikes to reduce the
deficit (though history shows that marginal income tax hikes never
generate the expected revenue), “This fiscal shock is projected to
result in 2013 real GDP growth of 0.5%, whereas in the absence of
this fiscal shock, real GDP growth is estimated at 4.4%. CBO
projects that under current law policies, the economy will contract
by 1.3% in the first half of 2013 before growing by 2.3% in the
second half of 2013, meeting the standard textbook definition of a
recession of two consecutive quarters of negative economic
growth.”
- “In today’s economy these changes would translate into a
decline in GDP of $200 billion and employment by roughly 710,000
jobs. Investment, the capital stock (net worth) and real after-tax
wages would also fall.”
Getting out a strong, effective message that Thelma and Louise
economic policy is bad for all Americans is particularly
important in the context of Gallup’s recent
conclusion that “Mitt Romney does not seem to be benefiting
from Americans’ declining economic confidence.” After all, if Mitt
Romney cannot sell his economic message, what can he sell — and
what would we want to buy?
Clearly, the Romney team recognizes this, and in a must-watch
speech given in Irwin, Pennsylvania on Tuesday, we witnessed a
more aggressive, combative Mitt Romney, a Mitt Romney who torpedoed
Thelma and Louise economics, a Mitt Romney who caused conservative
pundit Michelle
Malkin to comment, “I believed in what he was selling: A vision
for restoring American greatness and defending success.”
Romney told the assembled crowd, regarding Barack Obama’s recent
words denying that entrepreneurs are responsible for their own
accomplishments, that “President Obama attacks success and
therefore under President Obama we have less success. And I will
change that. I don’t think anyone could have said what he said who
had ever started a business or been in a business.… This election
is to a great degree about the soul of America. Do we believe in an
America that is great because of government or do we believe in
America that is great because of free people allowed to pursue
their dreams and build their futures?” Can I get a
“hallelujah!”?
Our very own Thelma and Louise should at long last be worried
that there’s a new sheriff in town.
When I first saw Thelma and Louise, I was more
concerned about the destruction of their car (a 1966 Ford
Thunderbird convertible) than about what happened to its passengers
who had earned and chosen their fate. I feel similarly today,
unconcerned (to put it politely) about what happens to the
political careers of Barack Obama, Patty Murray, and their friends,
but extremely worried about the havoc to be wreaked on our economy
while leftist ideologues, desperate to win re-election in the face
of years of publicly-recognized fecklessness, step on the gas as we
approach the fiscal cliff.
