“So when you put it all together, what you need is a package
that keeps taxes where they are for middle-class families; we make
some tough spending cuts on things that we don’t need; and then we
ask the wealthiest Americans to pay a slightly higher tax rate. And
that’s a principle I won’t compromise on, because I’m not going to
have a situation where the wealthiest among us, including folks
like me, get to keep all our tax breaks, and then we’re asking
students to pay higher student loans. Or suddenly, a school doesn’t
have schoolbooks because the school district couldn’t afford it. Or
some family that has a disabled kid isn’t getting the help that
they need through Medicaid.”
— President Obama
Remarks
at Daimler Detroit Diesel Plant
Redford,
Michigan
December 10, 2012
That’s right, folks. If taxes aren’t increased on the wealthy,
schools will suddenly be unable to afford schoolbooks and disabled
children will be denied Medicaid. Never mind that President Obama
was perfectly
happy to cut $110 billion from Medicaid during the fiscal cliff
negotiations of 2011.
To hear Obama tell it, if taxes are increased on the wealthy
then we would have no problems. It would bring about the end of
war, famine and acne in adolescent boys. Of course, if taxing the
wealthy is all that it takes to ensure that children aren’t
deprived of their textbooks and from disabled children from
receiving medical attention, then why doesn’t Obama see fit to
impose a 100% tax on the wealthy?
Well, because increasing taxes on the wealthy is about politics,
not economics. It is a panacea intended to pacify those who resent
the rich. Naturally, it is not in Obama’s interest to pacify this
resentment entirely. Hence the reason that Obama says he’s only
asking “the wealthiest Americans to pay a slightly higher
tax rate.” So when this round of tax increases on the wealthy
proves not be enough, then next year Obama will ask the wealthy “to
pay a little bit more.” And a little bit more next year and a bit
more the year after that and again a bit more. In more ways than
one, taxing the wealthy will never be enough.
If Obama were to see fit to tax 100% of the income of the
wealthiest people in this country, then people would come to the
painful realization that soaking the rich doesn’t work. It is
estimated that a 100% levy on the wealthiest Americans would
pay for eight days of government spending. And then Obama could no
longer blame the rich for the country’s problems. The President
isn’t going to deprive himself of his best political target. And
what good is a political target to Obama if he can’t hit it?
As it stands, the federal debt is more than $16.3 trillion and
the size of it increases on average by
nearly $4 billion every single day. So long as Obama is
not amenable to compromise when it comes to increasing taxes on the
wealthy, these average increases on the federal debt are bound to
climb with no end in sight.
Which brings me back to the school kids who Obama insists will
be deprived of textbooks if taxes aren’t increased on the wealthy.
As it stands, the Department of Education has a budget of
$68.1 billion. If $68.1 billion isn’t enough money to pay for the
books for every child in the country, then what is? If $68.1
billion isn’t enough money to pay for the books for every child in
this country that tells me we don’t have a revenue problem; we have
a spending problem. If we doubled the federal education budget next
year, I guarantee President Obama would still be speaking of school
kids without textbooks and demand the wealthy ante up more.
Given the current divisions in the GOP over the question of tax
increases on the wealthy, chances are that President Obama will get
his way. Yet perhaps this is what must come to pass. After a decade
plus of the Bush tax cuts, it may be that increasing taxes on the
wealthy might be the only way to convince Americans it is a bad
idea that doesn’t actually work. Alas, it will be a painful
lesson.
