The Obama Tax Cut For Millionaires

In his budget speech last night, Obama trotted out the usual “blame Bush” excuses, mixed with his ugly conviction that all money is the rightful property of the State, to produce this excuse for why he’s pumped out a series of record-breaking deficits:

For the last decade, we have spent more money than we take in. In the year 2000, the government had a budget surplus. But instead of using it to pay off our debt, the money was spent on trillions of dollars in new tax cuts, while two wars and an expensive prescription drug program were simply added to our nation’s credit card.

As a result, the deficit was on track to top $1 trillion the year I took office. To make matters worse, the recession meant that there was less money coming in, and it required us to spend even more – on tax cuts for middle-class families; on unemployment insurance; on aid to states so we could prevent more teachers and firefighters and police officers from being laid off. These emergency steps also added to the deficit.

So the government “spends” money on tax cuts – in fact, if you take this childish rhetoric seriously, the government actually runs up its credit cards to purchase tax cuts as gifts for the populace.  Obama took that $1 trillion deficit and nearly doubled it to “spend” money on “tax cuts for middle class families,” which are of course totally different from all previous tax cuts, thanks to the incomparable wisdom of Good King Barack.

(He also did indeed funnel a huge amount of money to public union employees, but it wasn’t “teachers and firefighters and police officers” whose jobs he was protecting.  His “stimulus” package was meant to ensure the thick lard of government bureaucracy was left undisturbed.)

Everything inside the state, nothing outside the state.  It doesn’t sound any better coming from Barack Obama than it did from Benito Mussolini.

All of this statist rhetoric is meant to buttress Obama’s insistence on raising the taxes of “the wealthiest Americans,” by which he means people who make over $200,000 per year.  Based on his own rhetoric, he’s prepared to drive America into default unless he gets these tax increases.

Ending the top marginal Bush “tax cut for the rich” would increase federal revenue by $709 billion over the next decade, according to Obama’s own February budget proposal.  Of course it would really be much less than that, once the dynamic effect of increased taxes kicked in, but we already know the Laffer Curve is a perpetual surprise to baffled liberals.

$709 billion over 10 years isn’t much, compared to projected deficits over fifteen times that size.  It’s hard to imagine it would be worth more than the lost revenue from the jobs it would destroy, as former Obama aide Peter Orszag predicted. 

It’s also far, far less than the amount lost by a “tax cut” the Democrats have been celebrating: the repeal of the 1099 reporting requirement from ObamaCare.

Remember that?  It was a “stealth” provision, hidden within ObamaCare’s thousands of unread pages, that would require all purchases of $600 or more from the same vendor, in a single year, to be backed up with a 1099 tax form.  It would have buried American businesses under millions of new tax forms each year.  It became so hated that Democrats joined Republicans in dancing down the Yellow Brick Road after they dropped a house on it.

What was the 1099 provision doing in a danged health-care bill in the first place?  Why, it was meant to scoop up all sorts of “uncollected” tax revenue presently hidden from the IRS, without actually raising anyone’s tax rates.  The Obama Administration projected that it would rake in $300 billion per year.

That’s more than three times as much as the “tax increase on the wealthiest Americans” that Obama says he’ll risk default to grab.  A great many of the individuals and small business owners who routinely spend over $600 per year with one vendor are “millionaires” under Obama’s definition.

So why weren’t the Democrats evil for joining with Republicans to kill the 1099 reporting requirement, and thus make the deficit $3 trillion worse over the next 10 years?  When he signed the 1099 repeal in April, Obama said, “Today, I was pleased to take another step to relieve unnecessary burdens on small businesses.”  According to his own rhetoric, doesn’t that make him “reckless and irresponsible?”