Commentary Magazine


The Tax Issue Is Back

A year ago, when the Tea Party movement was ignored or sneered at (much more so than now) by the Obami and the chattering class, the White House huffed that the rubes didn’t know that Obama had actually lowered taxes. The hordes were painted as confused — a tax revolt without the taxes. But the Tea Party crowd knew better. The grassroots movement was initially and remains a movement opposed to the massive growth of the federal government, the imposition of ObamaCare, the accumulation of massive debt, and the plethora of bailouts. It knew that after running up the tab, Obama would look for revenue to plug the gaping hole in the budget.

Rich Lowry observes:

The tea-party movement is an act of pre-emption, based on the simple calculation that higher spending eventually means higher taxes. For all the tsk-tsking about its supposed irresponsibility, the movement is attuned to the future in a way that the president — who hopes to evade or hide the consequences of his budgetary choices for as long as possible — is not.

Obama has always been happy to boast that he’ll let the Bush tax cuts on high-end earners expire at the end of this year. This blow for justice will initially generate all of about $40 billion annually, or only about 5 percent of the cost of Obama’s stimulus bill. Over 10 years, it will raise almost $700 billion, or only enough to cover about half of the budget deficit this year alone.

Obama will need more, and he’s not going to get it all from “the rich.”

So we hear whispers now of a VAT. And the bipartisan commission will certainly suggest all sorts of “revenue enhancers.” The Tea Partiers saw this coming, and so will the general electorate. The expiration of the Bush tax cuts and the prospect of many more tax hikes will be up for debate in the midterm elections. And having violated their pledge not to tax those making less than $200,000 to pay for health care, Democrats are poorly situated to defend middle-class taxpayers.

There was talk for some time that the tax issue had faded. Republicans would have nothing to argue about, claimed the mainstream pundits. But alas, like so much else, Obama has done a yeoman’s work for conservatives. The tax issue is back. In a big way.