Democrats To Propose Largest Tax Hike In History
House Democrats today will propose the largest tax hike in American history, one which will add more poor people to the tax rolls and which will further burden millions of small businesses. They will position this as fiscal discipline while refusing to trim federal spending, according to Robert Novak:
The new Democratic majority begins dancing the next phase of the tax-and-spend minuet in the House of Representatives today. Following the example set by their Senate brethren last Friday, House Democrats will adopt a budget resolution containing the largest tax increase in U.S. history amid massive national inattention.
Nobody's tax payment will increase immediately, but the budget resolutions set a pattern for years ahead. The House version would increase non-defense, non-emergency spending by $22.5 billion for next fiscal year, with such spending to rise 2.4 percent in each of the next three years. To pay for these increases, the resolution would raise taxes by close to $400 billion over five years -- about $100 billion more than what was passed in the Senate.
It had been assumed that the new Democratic majority would end President Bush's relief in capital gains, dividend and estate taxation. The simultaneous rollback of Bush-sponsored income tax cuts was a surprise. This reflects Democrats' belief that they can survive a long-term commitment to bigger government. Here is an audacious effort to raise the banner of fiscal responsibility while increasing spending and taxes.
This Democratic strategy is encapsulated in what Harry Hopkins, President Franklin D. Roosevelt's main man, is alleged to have told a friend at New York's Empire City race track in August 1938: "We will spend and spend, and tax and tax, and elect and elect." While Hopkins denied ever saying those words, they represented successful Democratic government and political strategy for the next two decades.
Well, as pundits across the political spectrum note, elections matter. Many people abandoned the GOP in the midterms because of their lack of discipline in federal spending. Discretionary spending rose by over 30% during the six years that the Republicans controlled both elective branches of government. They reduced taxes and grew the economy, but the GOP never delivered on their initial promise to reduce government an rein in spending.
Based on those failures, the nation gave the Democrats the majority in both chambers of Congress. What did we get? No decrease in federal spending; the Democrats want to grow the government by 2.4% each year, which would mean adding close to $100 billion in spending each year. In order to do that, they want to increase taxes across the board, choking off economic growth and making people even more dependent on the government.
By 2011, the added tax burden on every taxpayer would be over $1100 dollars. Twenty-six million small businesses would have to pay almost $4,000 in extra taxes. More than five million Americans whose incomes are too low to pay taxes now would have to start paying in 2011, making the Democratic plan more regressive than what it seeks to replace.
Democrats and taxes, together again after twelve years in the wilderness. It sounds like a movie romance -- and we're footing the bill for the production.