The tax hike cargo cult

President Obama appeared on CBS??? Face the Nation on Sunday, and made a remarkably foolish statement: ???And if we go back to the tax rates for folks making more than $250,000 a year, back to the rates that we had under Bill Clinton, we can close the deficit, stabilize the economy, keep taxes on middle class families low, provide the certainty that I think all of us will be looking for and I’m also going, by the way, to make some adjustments to Medicare and Medicaid that would strengthen the programs. But the way to do that is to keep health care costs low. It’s not to voucherize programs so that suddenly seniors are the ones who are finding their expenses much higher.???

I guess he???s field-testing ???voucherize??? as the Democrats??? new devil word.  It???s interesting how quickly they have moved to establish ???vouchers??? as a symbol of heartless indifference.  In Obama???s eyes, giving people a taxpayer-funded voucher for something, and letting them shop among competing providers eager to win their business, constitutes throwing helpless child-citizens to the wolves, rather than adding the power and efficiency of market competition to government-financed social programs.

I find myself wondering if this ???voucherization??? rhetoric is not only part of the Democrats??? MediScare campaign, but also battlefield preparation for the collapse of public education.  Nothing would clean up public union-dominated nightmares like the Chicago school system faster than an aggressive program of educational vouchers, with parents free to take their pick from competitive private and semi-private school systems.

At any rate, this ???voucher??? devil language is an absurdly unfair characterization of the Romney-Ryan Medicare reform proposals.  In fact, the only person currently ???voucherizing??? Medicare is Barack Obama.  National Journal ran an article over the weekend about a ???pilot program??? by the Obama Administration that would ???shift up to 2 million of the poorest and most-vulnerable seniors out of the federal Medicare program and into private health insurance plans overseen by the states.???

This might be an excellent idea that saves a ton of money??? but it???s exactly what our Demagogue-in-Chief is describing as callous, inhuman ???voucherization??? when Paul Ryan proposes it.  Furthermore, Ryan???s proposal was voluntary, with seniors able to opt for remaining within the traditional Medicare system.  Obama???s is mandatory, and targets the ???poorest and most vulnerable seniors??? to boot.

But the really crazy part of Obama???s statement was his belief that raising taxes on ???folks who make over $250,000 a year??? will somehow ???close the deficit.???  It should be noted at the outset that Obama is lying about his own plan ??? he wants to jack up tax rates on individual ???folks??? making over $200,000 per year.  $250k per year is the threshold for married ???millionaire??? couples under current Democrat Party dogma.  Don???t worry ??? it will get lower.  Much lower.  Give Obama another couple of years to rack up debt, and complain about the unsatisfactory results of his tax hike.  People making $150k per year will become ???millionaires??? before long.

And even with the extra $50k of padding to make himself sound more reasonable, Obama is deeply misleading when he describes his revenue targets as ???folks who make over $250,000 per year.???  Quite a few of those ???folks??? are actually small businesses counting all of their revenue as the owner???s personal income for tax purposes.  About 1.2 million small businesses with multiple employees on the payroll use this ???flow-through??? technique to handle their taxable revenue.  Obama???s $500 billion Taxmageddon is a cruise missile aimed right at American job creators, not a little extra levy upon the pocket change of millionaire playboys.

Obviously, a $500 billion tax hike isn???t going to ???close??? trillion-dollar deficits.  It???s not going to bring in $500 billion in extra revenue, either ??? no tax increase ever nets anywhere near 100 percent of its stated value, because the targets of the tax increase alter their consumption and investment behavior to avoid it.

Earlier in his Face the Nation appearance, Obama said that what he???s really talking about is a bargain to ???make sure that we cut $2.50 for every dollar of increased revenue.???  But this is the same candidate who laid out a good trillion dollars in increased spending during his Democratic National Convention acceptance speech a few days ago.  He???s not going to ???cut??? trillions of dollars in spending over the coming decade.  He???s not even going to reduce the projected spending increases above the ???untouchable??? baseline spending increases by that amount.  His last effort at a pork-encrusted ???jobs bill??? would have spent all the projected revenue from Taxmageddon at once.

These ???spending cuts for tax increases??? swaps are a sucker play foisted upon budget-conscious Americans for decades.  The tax increases happen immediately, and with a vengeance; the spending cuts never come.  Indeed, even if Obama seriously wanted to impose trillions of dollars in real, honest cuts over the next decade, he couldn???t guarantee anything beyond his own term of office.  No current Congress can impose fiscal discipline upon its successors through an installment plan.  Only absolute, immediate cuts for the promised amount could possibly impose a reduced spending baseline upon the next Congress.  They could still ratchet up spending from there, of course, but at least they couldn???t pretend it was happening automatically, or try to pretend it wasn???t happening at all.

The Democrats have become a cargo cult of tax increases, dedicated to notion that squeezing a few more bucks out of overtaxed Americans will magically restore fiscal sanity, even though the revenue from their tax hikes is either insufficient (Taxmageddon) or entirely symbolic (the Buffett Rule, which would bring in enough loot to fund Obama-scale spending for eleven hours.)  They simultaneously believe Americans will somehow be able to create the jobs and prosperity that have eluded us in the shadow of Obamanomics with even less money to engage in investment and commerce.

The Left???s faith in the mythical power of cargo-cult tax increases is invulnerable.  Even if they actually got their tax increases, they would address the resulting growth of the deficit in years to come by either claiming that the last round of tax hikes weren???t big enough??? or the last cheated trade of tax increases for spending cuts we never got didn???t happen at all.  Every time Democrats propose this scam, they act is if it???s never been tried before.

And of course, those who don???t think this bloated government needs to grow even larger are portrayed as stubborn and intransigent.  How come we never see a ???grand bargain??? where large-scale spending cuts are made immediately, and the tax increases only come after those real cuts (not reductions in the project rates of spending increase) have been fully implemented?