|
Higher Taxes: The Definition Of Recklessness
Investor's Business Daily
October 9, 2010
By Ernest S. Christian and Gary A. Robbins
In a democracy, high-ranking public officials
should at least be held to the same minimum standards of accountability
as reckless drivers and other tort-feasors when, heedless
of the consequences, they knowingly do things that are almost
guaranteed to harm others.
For example, although the consequences of impairing
the economy with a $700 billion tax increase starting in January
are well-known and cruel - nearly a million more jobs will
be lost and family incomes will shrink - President Obama and
the Democrats in Congress are pertinaciously rushing headlong
to do it anyway.
This is like driving the wrong way down a one-way street.
When the inevitable crash occurs, the resulting mayhem is
no accident; it's deliberate and the punishment should be
suitably harsh.
In the president's case, he must surely know that the harm
from his scheme to increase tax rates on the "rich"
(couples making as much as $250,001) will fall heavily on
the middle class and the working poor. The most famous academic
work of the president's recently resigned chief economist
(Christina Romer) tells him exactly how the poisonous effects
of his high tax rates will spread throughout the economy to
people at all income levels.
The Center for Data Analysis at the Heritage Foundation
recently used a well-known nonpartisan econometric model to
test the outcome of the president's tax-the-rich stratagem.
Even when the analysts built in assumptions especially favorable
to Obama, the results of his "rich only" tax increase
are devastating to jobs and growth, hitting hard at everyone
up and down the economic ladder - especially the middle class.
GDP will be made smaller by at least $1.1 trillion over
the next decade, and more than 800,000 jobs will be lost by
real people who will suffer real harm. They are not mere statistics.
And keep in mind that these dour econometric projections are
the "best case" example. The actual results experienced
by millions of Americans are likely to be worse.
President Obama has been warned repeatedly about reckless
taxation and other offenses. Former Treasury Secretary George
P. Schulz, the most broad-gauged occupant of that office since
Alexander Hamilton, recently took to the public square to
instruct the president chapter and verse from the bible of
common-sense economics.
He was joined by Professor Michael Boskin of Stanford University
and a phalanx of other renowned experts in urging the president
in no uncertain terms to stop endangering America's economic
future with more taxes, heavy-handed regulations, runaway
spending and record-setting deficits and debt.
Insofar as intent is concerned, the president must surely
know in advance that he cannot tax his way out of the widely
condemned deficit and debt crisis his excessive spending is
creating.
Careful econometric analysis shows that, after taking into
account the economic carnage wreaked by the higher tax rates
the president proposes, the net additional tax revenue collected
from the damaged economy will not be $700 billion as claimed
- but, instead, will over the decade be only $270 billion
greater than had tax rates not been increased.
Moreover, all but $21 billion of the total $270 billion
net 10-year revenue gain will be offset by a $249 billion
increase in spending for unemployment compensation and other
income-linked welfare payments triggered by tax-induced joblessness
and lower incomes. As a result, the econometric model projects
that the public debt will in 2020 be only $21 billion less
than had the purported $700 billion tax increase not occurred.
Contemplate the moral absurdity of a double shuffle that
deliberately runs up federal spending to crisis levels, and
then imposes a tax increase that does so much economic damage
it barely raises enough additional revenue to pay for the
increase in federal spending triggered by the economic decline
caused by the tax increase.
And to what purpose is this destructive circularity? Spending
will have been increased substantially, deficits and debt
will continue to escalate and - here's the kicker - the stage
will be set for additional tax (and spending) increases in
a self-perpetuating spiral of government growth and economic
decline.
These and other readily foreseeable tragic consequences
of Obama's plan to increase tax rates are classic illustrations
of the "spend-tax-destroy syndrome" that has so
far defined his administration - and that has over the last
50 years increasingly become the dominant characteristic of
the federal government in general.
Thus the Heritage econometric study and Christina Romer's
research paper - plus the irrefutable testimony of experience
and history - are Exhibit A in the People v. Big Government
case now pending in the supreme court of public opinion.
- Christian, an attorney, was a deputy assistant
secretary of the Treasury in the Ford administration.
- Robbins, an economist, served at the Treasury Department
in the Reagan administration.
|
