What do these things have in common: soft drinks, the money you hope to pass on to your children, electricity, employer-provided health benefits, appreciating stock, cigarettes, your income, beer and gasoline? All of these items, and many more, are targets for tax increases by the Obama administration and liberals in Congress as they strain to find ways to fund their ambitious agenda over the next few years.
During the presidential campaign, one of the most commonly-heard refrains was that the Obama tax plan would cut taxes for 95 percent of Americans, and that only the rich — only families earning more than $250,000 and individuals making more than $200,000 — would see their taxes increase. Everyone else would pay less in taxes. Full stop.
But in their first few months in power, President Obama and his allies have enacted and proposed a spate of new taxes that will affect all Americans, and often disproportionately those 95 percent of Americans Obama spoke so much about during the campaign.
Consider cap-and-trade. Beginning in 2012, President Obama wants to collect billions of dollars by selling carbon dioxide emission permits to businesses. Government would limit — cap — the amount of pollution industry can emit, and a business would be allowed to trade or buy permits to emit more carbon dioxide if it exceeds its limit. The permits would be a tax on energy production and energy use that would inevitably be passed on to consumers — including, of course, consumers who earn less than $200,000 — in higher utility bills, gas prices, public transportation costs and more.
Democratic Representative John Dingell put it best when he said, “Nobody in this country realizes that cap-and-trade is a tax, and it’s a great big one!” He’s right. One estimate suggests cap-and-trade would result in an average of more than $3,000 in additional expenses to the American family every year.
A cigarette tax hike is another revenue producer. The president has already signed a 61 cent per package cigarette tax, which a spokesman for tobacco retailers said was “the single largest tax increase on a product in the history of the United States.” An industry representative estimates that the tax increase would reduce sales by at least 10 percent and put 117,000 people out of work within the next six to nine months. And, Obama’s cigarette tax is an effective tax on the poor and middle class, who are three times as likely to smoke as the rich.
On Tuesday the Senate Finance Committee discussed additional ways to raise revenue, including federal taxes on soda and other sugary drinks, on alcohol and more taxes on tobacco products, all of which could raise $600 billion over the next decade.
Other liberal lawmakers have proposed a “fat tax” on salty, sugary and fatty foods. Soon, none of the deadly sins of secularism — the use of fossil fuels, smoking tobacco, imbibing alcohol and soda, and eating fast food — will be left untaxed.
Fittingly, levies on make-believe sins will be devoted to financing a government-run health care system that subsidizes authentic sins like abortion and physician-assisted suicide.
Conventional wisdom holds that raising taxes on bad behavior produces less of the bad behavior, which may decrease net tax revenue. With Obama and Pelosi at the helm trying to fundamentally change just about every area of public life, the ensuing disaster may lead to an uptick in consumption of tobacco, alcohol and fatty foods as citizens attempt to alleviate their anxieties over the perilous state of the nation. In a sad irony, their increased consumption may end up paying to bolster the gluttonous programs that made them depressed in the first place.
President Obama and his congressional allies need all this extra revenue not to pay down our debt or to bolster the military that keeps America safe but to underwrite their ambitious and costly expansion of government’s role in our lives, on everything from energy to education.
But their most costly initiative is health care “reform,” which may cost $1.5 trillion over the next ten years. Offering health coverage to the roughly 50 million Americans without it is estimated to cost $120 billion a year, about $90 billion of which Obama has no idea how he will fund.
Some experts believe that limiting tax deductions for employer-provided health insurance is the best way to fill the gap, but Obama is hesitant to support the idea because he campaigned against it last year as a “tax increase.”
We know that the administration wants to save money by cutting health spending, which includes research into medical effectiveness and health care rationing. Given that the majority of health care expenditures are devoted to care in the last year of patients’ lives, perhaps the Obama administration sees potential savings in compelling Grandma to recede into the night before her time is up.
Soon, every time you turn on a light switch, start your car or take a sip of that drink, you’ll have the satisfaction of knowing a significant share of the cost you’re paying to do it is going to fund President Obama’s plan to remake the American economy and take-over our most valuable institutions, including health care. The next time you buy a drink and toast “to your health,” the gesture may have added meaning.