As the choreographed impeachment hearings rivet Washington, Democrats with presidential aspirations race to outdo each other with innovative plans to confiscate the wealth of the rich. Perhaps now would be a good time, then, to take a trip down memory lane for educational purposes.
The year was 1991. George W. Bush occupied the Oval Office, having won the 1988 election with his signature sound bite, “Read my lips, no new taxes.” By 1990, however, Mr. Bush had abandoned his pledge — “Read my lips: I lied,” as The New York Post put it — in the face of an economic downturn and agreed to tax hikes as part of a budget compromise with Democrats, who controlled both the Senate and House.
The tax package included a new “luxury tax,” a 10 percent surcharge on yachts priced at more than $100,000, automobiles valued above $30,000, jewelry and furs sold for more than $10,000 and private planes that cost in excess $250,000. Government analysts projected the new tax would raise $9 billion over five years. Liberal Democrats gleefully hailed the measure as part of their ongoing effort to ensure the evil “rich” paid their “fair share” for their conspicuous consumption and gaudy displays of wealth. Sound familiar?
But what was it that Robert Burns wrote about “the best laid plans”?
It didn’t take long before leftist proponents of the tax came to the stunning realization that somebody actually had to build, manufacture and sell all those expensive toys and wares. And in most instances, those somebodies included middle-class workers, many of whom toiled in states run by Democrats.
When the new tax prompted the hated “rich” to cut back their splurges on Lamborghinis, Gulfstreams and Sunseekers, sales of many luxury products plummeted. The tax brought in a paltry $252 million over the first two years, according to the IRS, and a boat-building trade group estimated that industry alone lost 25,000 jobs.
Two years later, Mr. Bush had been forcibly retired and Democrats waved the white flag amid the economic carnage. In 1993, President Bill Clinton signed a measure repealing the tax on all but high-end vehicles — that surcharge ended in 2003.
Fast forward to 2019. Historically challenged progressive Democrats are again flogging the rich and advocating all sorts of measures to funnel more of their cash to Beltway bureaucrats, including a complicated tax on wealth and assets and even a levy on unrealized capital gains. After all, the more things change …
And like their clueless counterparts almost three decades prior, the Elizabeth Warrens and Bernie Sanders of the world seem blithely unconcerned about the many unintended economic consequences that would inevitably arise should their punitive populist pandering ever advance to reality.