The Next Tax Increase

The new tax hike is barely law and Obama already wants more.

In case you missed it, President Obama held a press conference Monday to make essentially two points: He won't negotiate with Republicans over raising the federal debt limit, and if Republicans want any spending cuts at any time in the next four years they'll have to raise taxes along with it. He won, so get used to it, chumps.

We'll elaborate on the debt-ceiling fight another day, but let's focus today on the President's demand to raise taxes—again. Millions of Americans, rich and middle class, are still recovering from the shock of the income and payroll tax hikes in their first 2013 paychecks, while ObamaCare's new taxes have also just kicked in. These are the biggest tax increases in at least 20 years, yet Mr. Obama is already stumping for another revenue raid.

The President even invoked the American people to support his third huge tax hike, saying Monday that "They don't think it's smart to protect endless corporate loopholes and tax breaks for the wealthiest Americans rather than rebuild our roads and our schools . . ." You already know the rest.

But wait. It was President Obama who insisted that the recent tax bill be loaded with tens of billions of dollars worth of additional "corporate loopholes," including for his billionaire buddies in the green-energy business. Too bad no one in the White House press corps asked about that contradiction. Maybe next Presidency.

The big fiscal news here is that Mr. Obama and the Democrats are all but conceding that the recent tax hike is little more than a token reduction in the deficit. The tax hike, while the biggest in 20 years, will raise only $620 billion at most over 10 years, and probably less. Yet Mr. Obama conceded in passing Monday that the debt ceiling will have to rise by something like $1.25 trillion to accommodate this year's deficit alone.

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Liberal commentators who aren't running for office are even more forthright. Former Vermont Governor and Democratic Party Chairman Howard Dean conceded in December on MSNBC that "this may seem like heresy" but "the truth is, everybody needs to pay more taxes, not just the rich." The Obama tax proposal to tax the rich was "a good start," he added, "but we're not gonna get out of this deficit problem unless we raise taxes across the board."

He's right about soaking the rich. Even if they taxed 100% of every dollar earned by every American who earned more than $500,000 in 2010, the feds would take in $1.29 trillion, or not much more than the entire 2012 deficit.

More and more liberals are picking up this theme and admitting that the middle class has to be taxed because that's where the money is. One Democratic newspaper recently suggested that Mr. Obama consider taxing "capital gains at the same rates as ordinary income" (which would be a 40% capital-gains rate, up from 23.8% now and 15% in December), "surcharges on multimillion-dollar incomes, and higher corporate taxes," plus "exploring carbon taxes . . . a value-added tax . . . and a financial transactions tax." Is that all?

Republican leaders Mitch McConnell and John Boehner have ruled out any such tax increases, at least outside of a tax reform that also cuts tax rates. But they and other Republicans should note that having agreed to raise tax rates once hasn't assuaged Democratic tax ambitions or won them any fiscal respite. It has merely whetted the Democratic appetite for more.

Once upon a time, the Democratic political strategy was "tax, spend and elect." Mr. Obama has turned that strategy into spend, borrow, elect and tax. And then tax some more. Republicans had better start educating the public about this, or they'll end up having to raise taxes again.

http://professional.wsj.com/article/SB10...p&mg=reno64-wsj

Republicans had better start educating the public about this, or they'll end up having to raise taxes again.

I object to spinning this around and blaming it on the public. It is the Republicans in Congress that hold the power of the purse.