Liberals have driven the debt-ceiling debate into the class-warfare swamp, promising most Americans they will continue to get something for nothing. This is a painless proposition for demagogues; the vast majority of Americans are not “rich” so it’s easy to propose that those earning more money should fix the problems created by big-spending politicians. This undermines America’s entrepreneurial spirit.
President Obama is pushing for what he calls a “reasonable proposition” of tax increases mainly on those families with incomes of $250,000 or more. “We weren’t balancing the budget off of middle-class families and working-class families,” he said last week. “And we weren’t letting hedge-fund managers or authors of best-selling books off the hook.” Left unsaid was that the top 10 percent of earners are already on the hook for around 70 percent of total income taxes, and the bottom 50 percent pay next to nothing. If “fairness” was as important to liberals as they say it is, they would be seeking balance by raising taxes on the low end of the income scale.
Many of the families in Mr. Obama’s tax crosshairs wouldn’t consider themselves wealthy. The quarter-million-dollar dividing line between the so-called rich and the rest of America is a holdover from President Clinton, who famously defined millionaires as those earning a million dollars over four years. Inflation in the 18 years since has put even more Americans into this bracket; the equivalent earning power in today’s dollars would be almost $400,000. While those families who earn $250,000 are certainly well off, they tend to cluster in the areas of the country that have the highest costs of living. They are not likely to be hedge-fund managers; more apt stereotypes would be high-ranking school administrators, union leaders and married federal workers near the top of the bureaucratic pay scale.
The “private jet owners” Mr. Obama uses to sell his vision of higher taxes are the same people who, under other circumstances, would be creating jobs the White House would take credit for. Government economists have been mystified by the recent lack of job growth, but the reason is transparent: Business leaders don’t trust Mr. Obama. “This administration is the greatest wet blanket to business, and progress and job creation in my lifetime,” said Steve Wynn, CEO of Wynn Resorts, on Monday. “[A]ll of us in this marketplace that are frightened to death about all the new regulations, our health care costs escalate, regulations coming from left and right. … [T]hose of us who have business opportunities and the capital to do it are going to sit in fear of the president. … Everybody’s afraid of the government and there’s no need soft-peddling it - it’s the truth. It is the truth.” Mr. Wynn reiterated, “The business community in this [country] is frightened to death of the weird political philosophy of the president of the United States. And until he’s gone, everybody’s going to be sitting on their thumbs.”
More ambitious class warriors want to dispense with tax schemes altogether and round up the golden geese for slaughter. The money held by the rich is a “national resource” ripe for the plucking, according to left-wing activist filmmaker Michael Moore. Of course, if government confiscated the wealth of America’s billionaires overnight, it would bring in around $1.3 trillion. This one-time mass theft wouldn’t be enough to cover the current fiscal year’s budget deficit and the mere act of confiscation would destroy the U.S. economy. Unless Mr. Obama can control his appetite for spending borrowed money, America will hit the wall.