Barack Obama, like every Democrat to come down the pike in the last thirty years, promises only the “rich” will pay more taxes. Adam Lerrick explains why that’s not the case and what follows:
The plunder that the Democrats plan to extract from the “very rich” — the 5% that earn more than $250,000 and who already pay 60% of the federal income tax bill — will never stretch to cover the expansive programs Mr. Obama promises.
What next? A core group of Obama enthusiasts — those educated professionals who applaud the “fairness” of their candidate’s tax plans — will soon see their $100,000-$150,000 incomes targeted. As entitlements expand and a self-interested majority votes, the higher tax brackets will kick in at lower levels down the ladder, all the way to households with a $75,000 income.
. . .
The sequence is always the same. High-tax, big-spending policies force the economy to lose momentum. Then growth in government spending outstrips revenues. Fiscal and trade deficits soar. Public debt, excessive taxation and unemployment follow. The central bank tries to solve the problem by printing money. International competitiveness is lost and the currency depreciates. The system stagnates. And then a frightened electorate returns conservatives to power.
So, in some sense conservatives despondent about the prospects of an Obama presidency can hope the process is self-correcting. Obama can’t possibly spend all that money on domestic goodies without hiking taxes on lots and lots of non-rich people — or borrowing even more than we already have. However, he could pull a “fast one” — drop his big spending plans, delay a tax hike, put in some mild pro-growth measures, boost free trade and help settle the markets.
But really, with a huge Democratic majority itching to go through their wish list what are the chances of that? Not great. Republicans may be quietly rooting for Obama to let out his inner liberal — it may be their only shot to claw their way out of minority status.