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Townhall
Finance
Higher Taxes
Mean Bigger Government, not Lower Deficits
by Daniel J. Mitchell
President Obama and other statists in Washington want a big
class-warfare tax hike. They claim the additional revenue is necessary
to reduce red ink.
But their ideological crusade is based on some blatant distortions.
They tell us that tax increases are necessary, but even CBO data shows
that the budget can be balanced in just 10 years if politicians merely
limit federal spending so that it grows by “only” 2.5 percent per year.
They tell us the “rich” should pay more, but we know upper-income
taxpayer have considerable ability to alter the timing, level, and
composition of their income, so we can expect significant Laffer Curve
effects.
They tell us that the money will be used to reduce the deficit, but at
the same time they want to cancel the sequester, thus eliminating the
only source of spending restraint from the 2011 debt-limit agreement.
In other words, the Obama tax hike will make government bigger, even if
some naively support the tax hike because they want smaller deficits.
That being said, I’m not overly optimistic that Obama’s divisive
proposal can be stopped, largely because I don’t think Republicans will
take my advice on how to win this fight.
Read the rest of this article at Townhall Finance
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