There are two frauds being perpetrated on an apparently willing public today in the discussion over raising taxes.
The first is the canard that the federal government is the same thing as the American economy – that to help the economy, we must feed the federal government more in taxes.
That’s just unalloyed lunacy. The government is not the economy. And it’s indisputable that the more the government takes out of the economy, the less money there is in it.
Just remember, when you hear someone touting higher taxes as a means of fixing the economy: The government and the economy are not the same thing.
The second ruse being foisted on you is that higher tax rates on the wealthy is about the math.
Syndicated columnist Charles Krauthammer makes this point elsewhere on this page when he writes, “It has nothing to do with economics or real fiscal reform. This is entirely about politics. It’s Phase 2 of the 2012 campaign.”
His point: The president’s own deficit reduction commission cited $1.1 trillion a year in tax loopholes and deductions that could be used to bring in more revenue without raising tax rates. If the government succeeded in snaring but 1 out of 10 of those dollars, it would raise $1 trillion over 10 years.
In other words, Krauthammer argues, it is a political ploy and sheer economic fiction that the only way to raise such tax revenues is to increase rates.
It is clear from observing this president and listening to his own words that he is more focused on punishing the successful than on balancing the budget.
Exhibit A: He admitted in a primary debate in the 2008 election campaign that he’d like higher capital gains tax rates as a matter of fairness – even if they brought in fewer dollars, as has historically happened.
Dan Mitchell of the Cato Institute think tank in Washington also seems to suggest the president’s tax-hike proposal for the rich is more about politics than economics.
“Obama’s main goal in the fiscal cliff negotiations is to impose a class-warfare tax hike,” he was quoted Wednesday.
In short, the president’s position is less about the math than it is about trying to referee life’s haves and have-nots. What he said in the 2008 campaign to “Joe the plumber” about spreading the wealth around? He meant it.
This is not about numbers as much as it is about ideology. This president seems to believe it’s his job to make life fair – which, of course, presupposes knowing what is and isn’t fair. He’s more concerned with moving items around on a balance sheet to fit his world view than he is on making the columns balance.
Agree with him or disagree. But just understand what’s really at work. It’s not about the math.
To paraphrase James Carville’s old mantra, it’s the politics, stupid.