Originally published at USDailyReview.com
My Twitter friend @keder posted something last week that struck me:
“Washington is not suffering from a ‘revenue problem.’ This year, Washington will collect $400 billion more than it spent in the year 2000.”
I replied and thanked him for tweeting that figure because it reminded me of how utterly contradictory liberals can be when it comes to taxation and spending. Many on the left were apoplectic when President Obama decided to extend the Bush tax cuts last December. The liberal blogosphere was rife with claims that the tax cuts of the 2000′s were responsible for the “Great Recession” – completely ignoring, of course, other more realistic factors like a problematic monetary policy that encourages economic bubbles and dangerous levels of deficit spending. Oh, and they also conveniently forgot about the fact that during 2005, the period right after the Bush tax cuts, federal revenues were at record highs.
Nonetheless, a typical line used to denounce tax cuts and President Bush (who, for the record, I think was a terrible President, despite my Republican affiliation), is that under Clinton, things were so great! Even ignoring the fact that we were on the expansion side of both a dot-com and real estate bubble, if we’re to accept the premise that the Bush tax cuts hurt the economy and that Clinton was the second coming of Jesus, to return to the promised land of the 90s, we’d have to make a radical change at this juncture: Reinstate Clinton era federal spending. The left loves to fear monger about what would happen if we returned to pre-2008 spending (as suggested by conservatives like Paul Ryan) as if prior to 2008 we lived in the dark ages. Yet at the same time, the Clinton era was perfect? Try to make sense of that, because I can’t.
Ultimately, given the extent of our national debt today, with or without an extension of the Bush tax cuts, we’d still be in an unsustainable situation. It’s been proven mathematically time and again that even if we taxed every millionaire and billionaire 100%, it wouldn’t even make a dent in the problem.
The Wall Street Journal does the math for us:
“Imagine that instead of proposing to raise the top income tax rate well north of 40%, the President decided to go all the way to 100%. Let’s stipulate that this is a thought experiment, because Democrats don’t need any more ideas. But it’s still a useful experiment because it exposes the fiscal futility of raising rates on the top 2%, or even the top 5% or 10%, of taxpayers to close the deficit. The mathematical reality is that in the absence of entitlement reform on the Paul Ryan model, Washington will need to soak the middle class—because that’s where the big money is …..
….. Assume that tax policy confiscated all the taxable income of all the “millionaires and billionaires” Mr. Obama singled out. That yields merely about $938 billion, which is sand on the beach amid the $4 trillion White House budget, a $1.65 trillion deficit, and spending at 25% as a share of the economy, a post-World War II record ….
….. Say we take it up to the top 10%, or everyone with income over $114,000, including joint filers. That’s five times Mr. Obama’s 2% promise. The IRS data are broken down at $100,000, yet taxing all income above that level throws up only $3.4 trillion. And remember, the top 10% already pay 69% of all total income taxes, while the top 5% pay more than all of the other 95% …..
….. Let’s perform the same exercise in 2005, a boom year and among the best ever for federal revenue. (Ahem, 2005 comes after the Bush tax cuts that Mr. Obama holds responsible for all the world’s problems) …..
….. In 2005 the top 5% earned over $145,000. If you took all the income of people over $200,000, it would yield about $1.89 trillion, enough revenue to cover the 2012 bill for Medicare, Medicaid and Social Security—but not the same bill in 2016, as the costs of those entitlements are expected to grow rapidly. The rich, in short, aren’t nearly rich enough to finance Mr. Obama’s entitlement state ambitions—even before his health-care plan kicks in.”
Given these figures, it’s beyond obvious that screaming about the evils of the Bush tax cuts and “the rich” are strawmen the left use to engage in class warfare demagoguery; facts and figures be damned.
Personally, in my libertarian-leaning fantasy world, I’d love to slash over half of all federal spending – but my realistic side is quite content with the notion of rolling back our commitments to the glory days of the 90′s that liberals hypocritically tout. Here’s a compromise for you: Want to return to 1998 tax rates? Fine with me; if we go back to 1998 spending. In 1998, the federal budget was 1.7 trillion. Today, we spend 3.8 trillion – and borrow 43 cents of every dollar with no plan to pay it back. Given the circumstances, most conservatives I know would be thrilled to make a concession like the one mentioned above; especially if we’re able to get some tax code and entitlement reform in there; but that’s a discussion for another day.
We all know that the left would flat our reject such a compromise. Just imagine their reaction to the proposition of actually cutting 2.1 trillion in real (not projected) expenditures – that figure being the difference between 2011 and 1998 spending levels. We’ve heard fear-mongering about dead grandmothers and starving poor people for much, much less. Given their head-in-the-sand approach to the mere mention of spending cuts, liberals really need to do a better job of addressing the disconnect between their worship of Clinton and a misguided, demagogic distaste for the Bush tax cuts – a measure that, as I stated before, actually led to higher federal revenues.
You can’t logically make an argument about the supposed danger of tax cuts without considering related revenue and spending levels. However liberals, always looking for ways to stir up class warfare sentiments during campaign season, manage to do just that – consistently. Then again, these are the same brilliant minds in charge of trying to ‘fix’ our current economic woes – and this whole 9.1% unemployment with a $14,696,963,569,782.73 national debt debacle isn’t doing much to showcase liberal ‘logic’ either.