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.