Howard Dean: Honestly, Everyone's Going to Have to Pay Higher Taxes Soon

Posted: Dec 06, 2012 3:46 PM

This candid assessment from former DNC Chairman Howard Dean comes after the election, of course -- but better late than never, I suppose.  Listen up, middle class.  The truth comes out:

Note well Larry nodding in agreement as Dean delivers his "heretical" news.  Whether or not they'll say so publicly, most Lefties recognize that across-the-board tax hikes are a necessary ingredient in their broader project of unending government expansionism.  Beating up on "the rich" is a politically-convenient ploy for the moment, but the math doesn't lie: Taxing only the upper echelons of income earners and small businesses would reap an insufficient pittance in the final analysis.  The government's unsustainable spending will soon require many more people to pay their "fair share" to the federal government.  Some voters who are currently on board with the Left's soak-the-rich crusade will one day (perhaps soon) discover that they themselves are the new "rich," with of their livelihood and income suddenly in Big Government's crosshairs.  Dean is at least doing everyone a favor by serving notice early.  He is very enthusiastic about middle class tax increases and deep defense cuts, but very protective of all other spending.  MSNBC leading light Krystal Ball chimes in with a cautionary note about "timing," praising President Obama for rejecting deficit reduction, which she insists isn't important "right now."  What's really needed, she explains, is more stimulus spending to create jobs -- but if we must pretend to care about deficits and debt, boosting tax rates on rich people is the "least damaging" option.  She apparently hasn't heard about the approximately one million productive small businesses that would be impacted by these hikes, which an independent study has estimated would kill 700,000 American jobs.  These business owners aren't figments of Republicans' imagination; they're real people with very real worries about what the government has in store for them:

If taxes go up next year under Mr. Obama's plan, Mr. Heitman worries he won't be able to sustain the growth. "I'm afraid that if our [tax] rates go up next year there won't be enough left after taxes to invest heavily in new product lines," he said. "We are typesetting our 2013 catalogue now. Because of the uncertainty about the tax rate, there are items we will have to leave out." Kim Irwin said for the last nine months she has badly needed an employee to handle clerical and accounting tasks at her firm, Integrity Wire Inc., a wholesale distributor that sells wire and cables for transit and construction projects in Huntington, W.Va. The uncertainty over potentially higher taxes, however, has made her too nervous to hire.  

What's imperative right now is jobs growth and economic let's confiscate more money from the group of small businesses that employs more than half of the private sector workforce.  Super.  Ms. Ball sums things up: "I agree...if we're going to continue to make the promises and keep the promises that I think are so important...we probably will have to raise taxes on a lot of people.  But it's a question of timing of when do we want to make those choices."  While she's right about the practical consequences of her ideological preferences, she's wrong about our capacity to keep the unpaid-for promises that our government continues to make, even with major tax increases on everybody.  Once again, the facts:

When the accrued expenses of the government's entitlement programs are counted, it becomes clear that to collect enough tax revenue just to avoid going deeper into debt would require over $8 trillion in tax collections annually. That is the total of the average annual accrued liabilities of just the two largest entitlement programs, plus the annual cash deficit. Nothing like that $8 trillion amount is available for the IRS to target. According to the most recent tax data, all individuals filing tax returns in America and earning more than $66,193 per year have a total adjusted gross income of $5.1 trillion. In 2006, when corporate taxable income peaked before the recession, all corporations in the U.S. had total income for tax purposes of $1.6 trillion. That comes to $6.7 trillion available to tax from these individuals and corporations under existing tax laws. In short, if the government confiscated the entire adjusted gross income of these American taxpayers, plus all of the corporate taxable income in the year before the recession, it wouldn't be nearly enough to fund the over $8 trillion per year in the growth of U.S. liabilities. Some public officials and pundits claim we can dig our way out through tax increases on upper-income earners, or even all taxpayers.  In reality, that would amount to bailing out the Pacific Ocean with a teaspoon. Only by addressing these unsustainable spending commitments can the nation's debt and deficit problems be solved.

I'll leave you with some disquieting insights from conservative columnist Mark Steyn, who posits that Americans aren't really any more opposed to massive government than Europeans; we just pretend to be because we don't want to grapple with the reality of  paying for it:

Generally speaking, functioning societies make good-faith efforts to raise what they spend, subject to fluctuations in economic fortune: Government spending in Australia is 33.1 percent of GDP, and tax revenues are 27.1 percent. Likewise, government spending in Norway is 46.4 percent and revenues are 41 percent — a shortfall but in the ballpark. Government spending in the United States is 42.2 percent, but revenues are 24 percent — the widest spending/taxing gulf in any major economy. So all the agonizing over our annual trillion-plus deficits overlooks the obvious solution: Given that we’re spending like Norwegians, why don’t we just pay Norwegian tax rates? ... You cannot simultaneously enjoy American-sized taxes and European-sized government. One or the other has to go.

We know where Howard Dean, Krystal Ball & Co. come down on this equation.  When push comes to shove, will Americans agree?