The Obama campaign is arguing that Mitt Romney wants to cut taxes for rich people and pay for it by raising taxes on the middle class (a charge which has been debunked).
But if average Americans are going to get socked with a major tax increase, isn’t it more likely to come from a second Obama term than a first Romney one?
1. Obama has already raised taxes on the middle class. While it’s true that the president hasn’t raised tax rates for households making under $250,000, he has signed off on a whole mess of other tax broad hikes, about $500 billion worth over ten years. And that isn’t counting the individual mandate tax. Total healthcare reform taxes equal more than $1 trillion over ten years.2. Obama economic advisers want middle incomers to pay more. Here’s former adviser Jared Bernstein in the Financial Times today:
Barack Obama, backed by Senate Democrats, is calling for the upper-income Bush tax cuts to expire. But contrary to popular belief, Mr Obama has already been an aggressive tax cutter. His cuts have helped considerably in reducing recessionary damage to family incomes, but there needs to be a more robust plan to return to fiscal health.
That plan will have to include tax increases beyond just the wealthiest households, although that is the right place to start. … The best thing to do, once the economic recovery is solidly under way, is to simply let the Bush tax cuts expire and return to the tax structure that prevailed under Bill Clinton.
And here’s former Obama White House budget chief Peter Orszag:
In the face of the dueling deficits, the best approach is a compromise: Extend the tax cuts for two years, and then end them altogether. Ideally, only the middle-class tax cuts would be continued for now. Getting a deal in Congress, though, may require keeping the high-income tax cuts, too. And that would still be worth it. … More troubling, middle-class and lower-class families would be saddled with higher taxes. That’s a legitimate concern, but also a largely unavoidable one if we are to tackle the medium-term fiscal problem.
3. Obama has never explained how the U.S. can get control of its debt problem by only taxing the rich. As Treasury Secretary Timothy Geithner infamously told House Budget Chairman Paul Ryan: “We’re not coming before you to say we have a definitive solution to that long-term problem. What we do know is we don’t like yours.”
Maybe the reason Team Obama has not released a long-term budget plan, as Ryan has, is because doing so would reveal massive and broad tax increases needed to pay for future Democrat spending plans.
4. Obama has already toyed with the idea of middle-class tax hikes. Here was Obama’s reaction, as recounted in The Escape Artists: How Obama’s Team Fumbled the Recovery, when aides in 2009 pitched him on letting all the Bush tax cuts expire:
He gave no indication that he was troubled by the plan’s most explosive feature: that it would likely break a central campaign promise—not raising taxes on the middle class—one Republicans would surely wrap around his neck with populist glee.
Bottom line: Folks on the left see America, including those in the middle, as undertaxed — especially in light of the need for more revenue to pay for their future spending plans, whether Medicare, Obamacare, or a “public investment” agenda. Liberal wonks would love to tack on a value-added tax to the current system to raise hundreds of billions more in tax revenue.
Hard to believe Obama believes any different.