I’d like to thank President Obama for taking the time last week to explain why conservatives have been right about taxes all along.
Last Wednesday, Obama took his perpetual campaign to Twitter, encouraging supporters to send messages about how a middle-class tax increase would affect them. Never mind that no one is proposing a middle-class tax increase; the difference between Democrats and Republicans concerns raising taxes on couples earning more than $250,000 per year.
Even that difference concerns not whether they should go up, but by how much and which means: GOP leaders have offered to raise taxes on high earners by $800 billion over 10 years by limiting how many deductions tax filers can take. Obama wants to raise $1.6 trillion over 10 years by limiting deductions and raising tax rates.
Along the way, however, Obama conceded three of the main points the right long has made about raising taxes. And it only took him five of the 140 characters allowed for a tweet to do it.
How did he do that? Saying the average middle-class family would see its taxes rise by $2,200 if all tax rates were to revert to Clinton-era levels, Obama asked his tweeps to list the things they wouldn’t be able to buy without that money. Which he called, including the hashtag symbol frequently used on Twitter, #My2K.
“My” $2,000? Was the president really acknowledging that what we earn is our money?
More to the point, was he acknowledging — as conservatives always say — that taxpayers may have better uses for their money than the government does? Otherwise, shouldn’t he have no objection to the government taking #My2K?
If the answer to all three questions is “yes,” why should it be any different for higher-income earners?
The implication of #My2K, made explicitly by Obama at other times during the present tax debate, is that raising taxes is bad for the economy. That’s traditional conservative point about tax hikes No. 2. But, again, he only gets this one half-right.
Obama seems to believe consumption alone matters to the economy — and that consumption, or at least economically meaningful consumption, stops at $250,000 per family per year. After that point, if I’m following his logic correctly, consumption must not really matter.
What explains this? Is it some notion that dollars become less valuable to the economy as they accumulate with one person? If so, maybe we could call it the Theory of Obamativity.
Does he believe rich people just swim around in the money they earn that exceeds $250,000, Scrooge McDuck-style?
Or does he believe that when they invest, rather than spend, that has no positive impact on the economy? He sure does speak glowingly of government’s “investments.”
Strangely enough, his comment two years ago when extending all tax rates was that it was “the right thing to do for the economy.” At the time he said that, the economy had grown at an average of 2.8 percent over the previous four quarters. Today, the average for the past four quarters is down to 2.5 percent.
Finally, with #My2K, Obama seems to acknowledge the middle-class tax rates Washington is talking about extending came about as the “Bush tax cuts” — not the “Bush tax cutsfortherich,” as Obama and other Democrats are accustomed to calling them.
In fact, if Obama believes the larger economic impact of the cuts lies with the rates for the middle class, doesn’t that confirm, as conservatives have long pointed out, that the vast majority of the money stays with the middle class? (That’s “stays with,” not “goes to.” Don’t forget the “my” in #My2K.)
Now that the president agrees with us about these basic tax principles, perhaps it isn’t asking too much for him to acknowledge one thing more.
The only way federal tax revenues are going to return to their long-term historical average — as they did in the years before the 2008 financial crisis — and begin to pay for all the spending Obama wants is for the economy to get back to growing rapidly. And you won’t find many economists who believe tax increases alone will do that.
– By Kyle Wingfield