Leftists Admit They Want Big Tax Hikes on the Middle Class

Leftists Admit They Want Big Tax Hikes on the Middle Class

Daniel J. Mitchell
Cato Institute
August 11, 2012

While I disagree with statists, I sometimes admire their discipline. They are very good at staying “on message.”

I am 100 percent confident, for instance, that they intend big tax hikes on the middle class, even though they would piously swear an oath to the contrary. Indeed, I suspect more than 90 percent of them secretly would like a value-added tax.

It’s not that they necessarily dislike ordinary people, but privately they understand that you can’t finance big government by taxing rich people.

Simply stated, there aren’t enough of the “1 percent.” Moreover, rich people have significant control over the timing, composition, and level of their income, so class-warfare tax hikes inevitably will fail to generate much revenue (yes, the Laffer Curve exists).

So it makes sense that they want to screw the middle class, but it’s also obvious that they don’t want to admit this is their goal. As such, it’s always interesting and revealing when folks on the left slip up and admit their true intentions.

• The New York Times endorsed higher taxes on the middle class in 2010.
• The then-House Majority Leader Steny Hoyer also gave a green light that year to higher taxes on the middle class.
• Earlier this year, MIT professor and former IMF official Simon Johnson argued that the middle class should pay more tax.

In recent days, more leftists have come out of the we-only-want-to-tax-the-rich closet.

Here’s some of what Jared Bernstein, former economist for Vice President Biden, just wrote for the U.K.’s Financial Times.

That plan will have to include tax increases beyond just the wealthiest households, although that is the right place to start. But what should happen next? …The best thing to do, once the economic recovery is solidly under way, is to simply let the Bush tax cuts expire and return to the tax structure that prevailed under Bill Clinton. …I’d urge Democrats to be forthright with the fact that we’re way below where we need to be in terms of revenue collection.

Bernstein, by the way, was a co-author of the infamous prediction that enacting Obama’s stimulus would keep the unemployment rate below 8 percent.

The Washington Post also is on board with the idea of big tax hikes on ordinary folks.

…it’s impossible to tackle the federal debt by taxing only the wealthy. …the middle class is going to have to pay more…the only way to achieve tax reform with a reasonable increase in revenue is to reset everyone’s rates at Clinton-era levels.

Keep in mind, by the way, that these proposals are just the tip of the iceberg. Once tax rates are pushed back to 2000 levels, then the drumbeat will sound for additional tax hikes.

“The middle class is an easy target”

And, sooner or later, the left will push for its big goal of a value-added tax.

This is not a trivial threat. Obama, for instance, already has expressed support, saying that the VAT is “something that has worked for other countries.” Romney’s also untrustworthy on the issue, having left the door open to this European-style national sales tax.

But the main point of this post is to explain that class-warfare taxes on the rich are a real threat, but they’re also just the camel’s nose under the tent. The left’s real goal is to fleece the middle class.

There’s no way to boost the burden of government spending to European levels without mimicking European tax policies.

And the dirty little secret about European tax policy is that taxes on the rich are about the same on both sides of the Atlantic. The reason government is so much bigger in Europe is that they ransack the middle class.

Let's see if the GOP can message this to the public and keep pounding these facts daily, I doubt it, but we'll see.