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The Tax Hikes Cometh

Grab your wallet.

Oct 4, 2010, Vol. 16, No. 03 • By MATTHEW CONTINETTI
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Let’s examine what the 111th Congress has accomplished so far. There was a $1 trillion stimulus bill that failed to jumpstart the economy. There was a $1 trillion health care overhaul that the public did not want. There was a financial bill that gave huge amounts of power to unelected regulators. And now, for their final trick, the Democrats who run Congress have decided to leave Washington without doing anything to prevent the largest tax increase in history. God only knows what they are planning for an encore.

The Tax Hikes Cometh

Photo Credit: Newscom

In a little more than 90 days, taxes on incomes, capital gains, dividends, and estates are going to rise. Not just for some families. For every family. And the Democrats haven’t lifted a finger to stop it. They haven’t even written a bill. They have not found the time, in the twenty months they’ve controlled Congress and the White House, ever actually to try to block the tax hikes. It’s amazing: The Democrats have no problem passing unpopular legislation. But when they are charged with doing something that the public actually wants, such as preventing the coming tax hike, they turn to jelly.

How did it come to this? President Obama wants to limit any tax increase to families making more than $250,000 a year. Republicans, along with many Democrats, say that raising taxes on anyone during a weak recovery is a horrible idea. Instead, this group suggests, why not extend current tax rates for another two years? After all, a bill to that effect could easily pass both houses of Congress.

But it’s not going to happen. The chances for a compromise are nil, at least until after the election. It’s a decision that reveals the depth of the Democrats’ ideological commitment. One of the president’s favorite lines during the tax debate has been that Republicans are holding tax cuts for the middle class “hostage” to tax cuts for the rich. But events have proven that it’s the Democratic leadership and Obama who are holding taxpayers hostage. It’s the Democratic leadership and Obama who would rather have taxes rise on everyone than extend current tax rates for everyone including the wealthy.

This obsessive focus on income redistribution has divided the Democrats and left them in the grip of a political panic. One reason no bill has been brought to a vote is the leadership is afraid they’d lose. They don’t want to be exposed as weak in the run-up to Election Day. Or, if they did win the vote, then Democrats would have supported higher taxes on small businesses. And since that’s not exactly a campaign winner, the Democrats have punted.

Notice how the actual, real-life, day-to-day economic fortunes of 300 million Americans do not figure in the Democrats’ philosophical and partisan calculations. Such is the tenor of government in the Obama presidency. Four years ago, remember, the Democrats pledged that they would govern differently from the corrupt and big-spending Republican Congress. It was an oath that President Obama broadened and deepened in 2008, when he spoke of bridging the divide between red and blue America and changing the culture of Washington. Americans took the Democrats at their word, entrusting them with power in 2006 and 2008.

What Americans didn’t realize at the time was that they were also emboldening an arrogant, belligerent liberalism. It’s a liberalism that believes all answers to political questions have been scientifically decided, in the liberals’ favor. Americans not only were handing the reins of government to a political party. They were handing those reins to a theory about how social and economic policy ought to work. The theory gave us the stimulus, Obama-care, and (in the House) cap and trade. The theory says you can raise taxes on high earners without damaging the economy. But the theory hasn’t produced the desired results. And the theory has no answers for Americans who support limited government.

What’s the legacy of the 111th Congress? The economy remains weak. Government has grown larger and is no more effective. So more lobbyists than ever are feeding at the trough. Corruption still exists. Trust in institutions keeps falling. Congress can’t pass a budget, and it can’t prevent a tax increase.

Democrats explain their failure by blaming Republican opposition or lamenting the filibuster. But these are sideshows. There always will be partisan disagreement, and Democrats will soon love the filibuster again. No, the reason Democrats have failed is that big-government liberalism has been exposed, over and over, as an inadequate response to the challenges of our times. Need evidence? Look no further than the great Democratic tax dodge of 2010.

—Matthew Continetti

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