In the hours leading up to the "Sequester" kicking in late last Friday, President Obama clung to his familiar refrain. In speech after endless speech, Obama said that it was simply "dumb" to reduce spending and predicted catastrophic consequences. What was needed, Obama argued, was higher tax revenue.
"Dumb" though it may be; the President conveniently forgot that the Sequester was his idea in the first place.
Republicans dug in and made the case that spending, not insufficient revenue from taxes, was the problem. While the Sequester was no one's ideal plan for solving the problem, it did at least take a tiny 2.4% step in the right direction. The GOP leaders made it clear they are willing to consider serious tax reform later this year, but reduction in spending needed to come first.
So, which argument is valid?
While the President argues for ever more revenue, the fact is Americans are paying record amounts of taxes particularly in the wake of the fiscal cliff deal he muscled through on January 1, 2013. The following chart tells the story:
Source: Investor's Business Daily, March 4, 2013
When making his argument for more tax revenue, the President always targets the wealthy. The fortunate folks at the top of the income ladder simply must pay their "fair share," he says without ever identifying what that upper limit of "fairness" would be.
But, as the AP reported over the weekend, "wealthy families already are paying some of their biggest federal tax bills in decades even as the rest of the population continues to pay at historically low rates. " Here's another chart:
Source: Associated Press, March 3, 2013
This President will likely never believe that the government sucks enough tax revenue blood out of the people, nor that government spends nearly enough. And, the Wealth-Distributor-in-Chief will never be satisfied until he "runs out of other people's money," as Margaret Thatcher said was the eventual result of the pursuit of Socialism.
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