How quickly Americans forget the Left's fiscal tricks.
History never fails to repeat itself, especially when scheming leftists get an upper hand.
We’re in a money panic today. So, President Obama advances what he pictures as a fair deal to chip away at our mountain of debt: We cut some spending, but we raise taxes as part of the deal. It’s only fair. Or so it seems to those with no memory.
Back in 1990, Washington also was in a money panic. Foreign creditors would own America within a decade, politicians fretted. As is happening today, back then the mainstream media were calling for tax hikes as part of any financial agreement, as they are today on reducing the $14.3 trillion debt or on raising the debt limit.
At that time (1990), President George H. W. Bush was promised by the Democrats $2 in spending cuts for every $1 in tax increases.
Senior Bush had promised his party: “Read my lips. No new taxes.” But Bush caved. The financial outlook seemed to justify it. And he mistakenly thought his opponents could be trusted on their side of the agreement.
You remember what happened: Not only did the $274 billion promised spending cuts never materialize, but also all the $137 billion in tax hikes slid through the Congress. The top marginal rate went from 28 percent to 31 percent.
Baseline spending was $22 billion higher than what the Congressional Budget Office (CBO) projected it would be before the fraudulent deal was struck. This led ever so easily to another tax increase in 1993 when Bill Clinton came to Office—up to 39.6 percent.
Even Ronald Reagan got taken for a ride. A Politico sifting of Reagan documents found the grand old man signed deficit-reduction in the 1980s that melded annual tax hikes with spending cuts, stunningly similar to what trickster Obama is now asking of Congress.
The most notorious was the Tax Equity and Fiscal Responsibility Act (FEFRA). It was a course change that followed Reagan’s signature income tax cuts in 1981. But in the six years afterward, four more deficit reductions tax acts were passed.
Memory lapses in Washington seem as ubiquitous as dementia in a nursing home. When Obama tried to make his case for including revenue raising in a bipartisan debt-cutting plan, he advised GOP lawmakers to talk to their constituents to ask them if they were “willing to compromise your kids’ safety so some corporate jet owners can get a tax break?” Obama had supported just such tax breaks as part of his 2009 fiscal stimulus package that would make buying such aircraft cheaper for companies.
Mysteriously, many seem to have amnesia about the risks in trying to tax the rich. Jimmy Carter and his colleagues enacted a stiff tax on the buying of yachts. Most of the rich therefore managed to do with last year’s yacht or they went abroad and bought a yacht where there was no high tax. The only people hurt were middle class Americans who build yachts in the U.S. Obama faces the same problem with corporate jets.
Taxing the rich has become such a sacred mantra with the Left that there is as much chance of their giving up that worn-out war-cry as there is going out to dinner without their pants on. The fact that there are more left-wing millionaires in Congress than there are Republican millionaires is a fact lost to the media and to most Americans.
Even though the richest 5 percent of Americans pays 60 percent of the federal income taxes and the bottom 50 percent of payers send Uncle Sam less than 3 percent of all income taxes, Obama keeps harping on the mythical complaint that the rich should pay “their fair share.”
Our tax code could be less distorted than it is, but it can’t squeeze a lot more money out of the economy. Taking more than people are willing to give entails more force than our government can get away with, and is, in the end, self-defeating.