No tax hikes? Oops!


Traveling the television talk-show circuit last weekend, Barack Obama's aides and advisers tested the waters for likely public response should the new president completely gut his campaign pledge to middle-class Americans that, "You will not see any of your taxes increase one single dime."

Mr. Obama has already signed tax hikes on alcohol and cigarettes, with no exemptions for the middle class. But the aides indicated the president now contemplates going much further.

Treasury Secretary Timothy Geithner on Sunday said he cannot rule out higher taxes to help tame an exploding budget deficit. Meantime, President Obama's chief economic adviser, National Economic Council Director Larry Summers, would not dismiss raising them on middle-class Americans as part of a health care overhaul.

On network TV Sunday, both Mr. Geithner and Mr. Summers sidestepped direct questions on Mr. Obama's intentions about taxes. But Mr. Geithner said the White House was not ready to rule out a tax hike to lower the federal deficit; Mr. Summers said Mr. Obama's proposed health care overhaul needs funding from somewhere.

This was all completely predictable. Idealistic leftists have been arguing for a century that they could fund massive and popular handouts to the masses -- free schooling, free retirement pensions, free medical care, whatever -- merely by increasing taxes on "the rich." And for more than a century, the little men with the green eyeshades and the slide rules have been pointing out to them, "No, you can't."

As you increase tax rates on "the rich," the first thing you learn is that "the rich" are not a fixed target. "The rich" hire bankers and lawyers to help them find legal ways to move their money -- and, if it gets bad enough, themselves -- into tax shelters, out of the local jurisdiction or, finally, offshore.

Raise taxes high enough, and receipts can actually drop.

What the number crunchers are also at endless pains to point out to their unhappy political bosses is that -- even, if by some miracle, you could round up all "the rich" at once, hold them upside down and shake them, setting them loose with nothing but their underwear and a begging bowl -- it still wouldn't provide enough to fund their endlessly multiplying welfare schemes.

To do that, you have to tax the same middle class to whom you're promising all those benefits.

"The simple reality remains that his ambitious overhaul of how Americans receive health care -- promised without increasing the federal deficit -- must be paid for," concluded The Associated Press on Sunday, adding that the president's men hit the TV trail this weekend to float tax-hike trial balloons "as the White House sought to balance campaign rhetoric with governing."

In other words, the president is on the verge of violating a vital, make-or-break, unambiguous campaign promise that the boobs should never have been dumb enough to believe in the first place. This is appalling and utterly corrosive to anything that remains of Americans' civic virtue and trust in government.

 

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