Based on news reports this week, you’d think President Obama plans to run as a fiscally conservative Republican in 2012. Democrats have expressed outrage over his apparent tax compromise with Republicans, allowing the "wealthy" to keep their George W. Bush-era tax cuts.
It’s rumored that one disgruntled Democrat even muttered "F**k the President!" during a contentious caucus meeting of House Democrats. Chants of "Just Say No!" could be heard coming from the meeting room—a far cry from the "Yes We Can" slogan that whipped Obama Democrats and voters into a fleeting frenzy just two years ago.
But don't be fooled by the political theater. Setting aside the deeply flawed provisions in the bill that make it unworthy of approval (the death tax revival, cash grants for green energy programs, vote-bribing pork, deficit-increasing spending, etc.), amidst this controversy there is a much deeper philosophical issue that deserves examination.
The American people are being led to believe that these tax cut extensions are a complete compromise for Obama and Democrats—that they are now essentially tax cutters. But let’s be clear. These tax levels are the status quo. To allow their expiration means a tax increase.
House Speaker-designate John Boehner’s spokesman accurately referred to the tax cut expiration as "job-killing tax hikes." Taxpayer-defending Republicans should not allow Democrats and the media to define the terms of the debate by using specious claims that this a huge tax cut for the wealthy. Without the extension, this is a huge tax increase for every taxpayer who is being squeezed in order to prop up Washington’s irresponsible spending. Even the word "extension" connotes centralized authority to allow taxpayers to keep the current tax level for a little while longer.
This is the wrong premise from which to even begin the debate over whether to extend tax cuts. The money belongs to those who earn it—not the tax collectors. We will decide how much we are willing to give to government in order for it to do those things the people cannot do individually, such as protecting our nation through a strong military and conducting international diplomacy.
Democrats would have the public believe they are cutting taxes and championing the middle class. But maintaining current tax rates during a recession isn’t a heroic act, it’s common sense. Or rather, real common sense would actually mean cutting spending and taxes to truly stimulate the economy.
The very fact that tax cuts have a sunset provision—a certain end-date—proves the pervasive socialist attitude in Washington that all money belongs to the government. Occasionally taxpayers are allowed to keep a little more of the money they earn, such as with a temporary tax cut usually targeted at jumpstarting a lagging economy. But when the tax cut expires and is extended, it should not be held up as some fearless action on the part of Congress. Taxpayers shouldn’t be viewed as beggars beneath the dinner table pleading for leftover crumbs. Nor should they be regarded as gullible fools who can be conned into believing maintaining current tax levels is really a tax cut.
Has our national discourse really devolved into such a state that the starting point is the assumption that government gets to determine how much money the people are allowed to keep? Such an assumption is antithetical to everything this nation was founded upon.
Class warfare has now also become an intrinsic part of the public debate over taxes. The rich are immediately demonized for not paying their “fair share.” So who exactly are “the rich”? One classic quip offers this definition: "rich begins where my income ends." Anyone making $250,000 or more a year will tell you they live well, but they’re not exactly the jet-setting crowd Democrats wants the public to visualize when they hear the word "wealthy."
In selling the tax deal, even the President is using Gallup polling showing two-thirds of Americans approve of lower tax rates for all Americans—including the wealthy. Certain entitlement-minded segments of the country want higher taxes on those they arbitrarily deem wealthy. But the majority of hard-working Americans understand that no one should be penalized for their success. Where is the incentive to become wealthy in a society that demonizes and punishes through excessive taxation?
President Obama is right: it’s time to fundamentally transform America—but not into the socialist state he envisions. It’s time to fundamentally transform the way we view taxation. Tax cuts should never be temporary and used only to stimulate the economy. The money does not belong to government—it belongs to the people who earn it.