If Democrats take Congress Tuesday, hide your wallet. Tax hikes and spending increases are right around the corner.
A Democratic House of Representatives most likely would feature California’s Nancy Pelosi as speaker and New York’s Charles Rangel as chairman of the tax-writing Ways and Means Committee. Pelosi and Rangel rarely have met a tax they didn’t love. In fact, they are remarkably candid about their dreams of shaking down taxpayers.
As the Associated Press’s David Espo reported October 5, Pelosi wants to roll back President Bush’s tax cuts and restore higher, Clinton-era rates for filers above “a certain level.” That could involve annual incomes above $250,000, but details will have to be worked out, the San Francisco Democrat indicated.
Republicans, “have only rewarded wealth, not work,” Pelosi complained. “We must share the benefits of our wealth” beyond the privileged, she continued. Thus, Pelosi dissed wealthy, hard-working surgeons, restaurateurs, and business owners.
Pelosi’s crystal ball malfunctioned when she attacked President Bush’s second tax-cut package on May 9, 2003. “None of these tax cuts is affordable,” Pelosi concluded. “None of them creates jobs, and they are not fair. All of them do damage to our long-term economic growth and contribute to the national deficit.”
Since January 2002, President Bush’s $1.72 trillion in tax cuts have helped propel America through 57 consecutive months of economic growth. Since Bush’s May 2003 tax-rate reductions, total non-farm employment has expanded by 6.6 million new jobs, Americans for Tax Reform estimates. Unemployment has plummeted from 6.1 percent that month to 4.4 percent in October 2006. Average real GDP has accelerated 3.7 percent since 2003’s tax cuts. Simultaneously, total household net worth has soared $14.4 trillion.
Also, treading more lightly on productive taxpayers has created a veritable Old Faithful of tax revenue. Consequently, the budget deficit has collapsed from a projected $521 billion in fiscal year 2004 to $248 billion in FY 2006.
Is this “not fair?” What, Nancy, could be fairer than 5.5-year-low unemployment, Dow 12,000, and rising household wealth within a booming economy?
Nonetheless, Pelosi remains a stalwart tax collector. This year, she voted against extending Bush’s tax cuts (which would cost 115 million taxpayers $1,716 each, on average), killing the Death Tax, and repealing the telephone excise tax (launched to finance the 1898 Spanish-American War). She also rejected Bush’s 2001 and 2003 tax cuts.
Rangel is Pelosi’s tax-hiking twin. They voted identically on these five measures. Rangel also said he “cannot think of one” Bush tax cut worth extending past its 2010 expiration date. Congress Daily asked Rangel if he would consider across-the-board tax increases: “No question about it,” Rangel replied. “Everything has to be on the table.”
Rangel makes the spendthrift Pelosi look stingy. According to the National Taxpayers Union’s “BillTally” calculations, if every measure Pelosi sponsored passed, she would have increased the last Congress’ net federal spending by $230.5 billion. Rangel’s equivalent sum is a mind-blowing $1.86 trillion in brand-new, net spending.
The Senate’s picture also is grim. If Democrats take control, Harry Reid of Nevada and Max Baucus would become, respectively, majority leader and Finance Committee chairman.
They both voted to maintain the Death Tax, scrap dividend tax cuts, and extend the 38.6 percent tax bracket. Reid, but not Baucus, also voted to hike the capital-gains tax and impose a windfall oil-profits tax.
In the last Congress, Reid sponsored $116.5 billion in higher net spending, while Baucus introduced $79.6 billion in such measures.
Alas, the GOP largely has abandoned fiscal discipline to spend riotously on national programs and parochial boondoggles. While this has embittered fiscal conservatives, Democrats look eager to exacerbate things.
NTU found that expected House Republican committee chairmen sponsored legislation last year to hike net spending by $10.1 billion on average. For their Democratic counterparts, the equivalent figure is a staggering $931.2 billion — a spending pace 92 times higher than the GOP’s!
Such is the fork in the road on November 7: To the Right, Republicans who cut your taxes and spend too much, but might be chastened into frugality. To the Left, Democrats itch to raise your taxes, spend even more money, and otherwise assert themselves after 12 years in the wilderness.
Hug your wallet, and choose wisely.