President Obama supports higher taxes, but he usually claims he only wants higher tax rates on evil rich people as part of his class-warfare agenda. Heck, he promised back in 2008 that, “no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.”
I guess we’re supposed to forget the higher tax burdens that were imposed on the middle class by Obamacare in 2010 and the SCHIP legislation in 2009.
Obama’s other rhetorical trick is to claim he wants a “balanced approach.” Translated from Washington-speak to English, that means he wants more of our money. But it’s a soothing way to demand more money. After all, who’s against “balance”?
I actually agree with Obama – but only if one uses honest math. Needless to say, Obama wants to use Washington math, where spending increases get redefined as spending cuts if the burden of government spending doesn’t rise as fast as was projected in some artificial baseline.
This is why the budget deals put together by politicians almost always are awful. In order to protect the goodies they hand out to various special interests, the politicians use fake numbers to pretend they’re restraining spending, but when the dust settles, it turns out that the only real result is that taxpayers are forking over more of their hard-earned cash to the clowns in Washington.
Actually, that statement is incomplete. We need to remember that taxpayers in other nations also get screwed by the political elite. Take a look at this stunning chart that was shown at yesterday’s Cato Institute conference on “Europe’s Crisis and the Welfare State.” Put together by Veronique de Rugy of the Mercatus Center, it shows that politicians across the Atlantic have imposed nine euro of higher taxes for every one euro of spending cuts.
And keep in mind, as Veronique noted in her comments, that many of these so-called spending cuts were merely reductions in planned increases!
This matters because I’m getting increasingly worried that gullible Republicans will get seduced into some sort of budget summit designed to trick them into supporting the Simpson-Bowles tax-hike package.
As I’ve previously explained, this would be a terrible idea. It means a big tax hike with, particularly an increase in the double taxation of income that is saved and invested. It also relies on gimmicks rather than real entitlement reform.
I don’t like higher taxes, but I wouldn’t be completely upset if at least we got some permanent reforms to control the growth of government. But that’s definitely not the case with Simpson-Bowles. And, as Veronique showed, it’s not the case in Europe either.
P.S. It’s rather ironic that the New York Times inadvertently revealed that the only budget deal that worked was the one in 1997 that cut taxes rather than raising taxes.
[…] want to get on Veronique’s bad side, let me take this opportunity to call attention to her good work on properly defining austerity,. And if you watch her testimony to a congressional committee, it’s also quite obvious that she […]
[…] is that politicians use anti-deficit and anti-debt rules as an excuse to raise taxes (which is what happened during Europe’s prior debt […]
[…] in Europe is simply another way of saying massive tax increases. National governments have boosted tax burdens substantially, but there hasn’t been much spending […]
[…] “bolnim rezovima”, ukupna razina državne potrošnje u EU je značajno porasla, a za svaki euro smanjenja javnih rashoda porezno opterećenje je povećano za novih 9 eura, tako da su ljevičarska lupetanja o “neoliberalnom kapitalizmu” u EU notorna […]
[…] in Europe is simply another way of saying massive tax increases. National governments have boosted tax burdens substantially, but there hasn’t been much spending […]
[…] since much of the “austerity” is the former variety rather than the latter, especially in Europe, it borders on malicious for the IMF to blame neoliberals (who want less spending) for the economic […]
[…] is a catch-all phrase that includes bad policy (higher taxes) and good policy (spending restraint). But with a few notable exceptions, European nations have […]
[…] whether it has anything to do with the fact that “fiscal consolidation” in Europe almost always means higher taxes? And, indeed, the ECB number crunchers have confirmed that the tax-hike approach is bad […]
[…] fail to distinguish between good austerity and bad austerity. If austerity means higher taxes, as has been the case so often in Europe, then it is unambiguously bad for growth. But if it means spending restraint (or even actual […]
[…] politicians say that this is a “balanced approach,” but this view is misguided, First, asVeronique de Rugy has shown, it generally means lots of new taxes and very little spending restraint. Second, it is based on […]
[…] off debt defaults or imposing massive tax hikes that dwarf any spending cuts (kind of like the tax-hike heavy “balanced” approach that President Obama favors for the United States) be what’s really behind the ongoing […]
[…] in Europe generally is just a code word for higher taxes. Governments only restrain spending as a last […]
[…] want to get on Veronique’s bad side, let me take this opportunity to call attention to her good work on properly defining austerity,. And if you watch her testimony to a congressional committee, it’s also quite obvious that she […]
[…] but not least, here’s one showing that Obama prefers the European version of a “balanced approach” rather than the version I put […]
[…] but not least, here’s one showing that Obama prefers the European version of a “balanced approach” rather than the version I put […]
[…] According to some estimates, this “balanced approach” in this plan has $54 of tax increases for every $1 of spending cuts. That’s even worse than what’s been happening in Europe. […]
[…] but not least, here’s one showing that Obama prefers the European version of a “balanced approach” rather than the version I put […]
[…] shared an astounding chart last month showing that tax increases account for 90 percent of the so-called “austerity” in […]
[…] they all imposed crippling tax hikes. Indeed, the tax increases in Greece were so severe that even the International Monetary Fund […]
[…] bad news is that Europeans have raised taxes. A lot. The semi-good news is that spending no longer is growing as fast as it was before the fiscal […]
[…] necessarily have produced good policy since many of the governments would have raised taxes (which they did anyhow!), but a few nations in Southern Europe may have done the right thing by copying the Baltic nations […]
[…] shared an astounding chart last month showing that tax increases account for 90 percent of the so-called “austerity” in […]
[…] in Europe generally is just a code word for higher taxes. Governments only restrain spending as a last […]
[…] in Europe generally is just a code word for higher taxes. Governments only restrain spending as a last […]
[…] off debt defaults or imposing massive tax hikes that dwarf any spending cuts (kind of like the tax-hike heavy “balanced” approach that President Obama favors for the United States) be what’s really behind the ongoing […]
[…] that type of “austerity” – as you can see from one of Veronique’s charts – is overwhelmingly comprised of tax […]
[…] that type of “austerity” – as you can see from one of Veronique’s charts – is overwhelmingly comprised of tax […]
[…] ” also advocate less spending, but you won’t be surprised to learn which option politicians select when given a choice between higher taxes and less […]
[…] But when governments supposedly try to deal with fiscal problems by raising taxes, you get dismal results. Just look at mess in Europe, where tax increases have been nine times larger than spending cuts. […]
[…] want to get on Veronique’s bad side, let me take this opportunity to call attention to her good work on properly defining austerity,. And if you watch her testimony to a congressional committee, it’s also quite obvious that she […]
[…] want to get on Veronique’s bad side, let me take this opportunity to call attention to her good work on properly defining austerity,. And if you watch her testimony to a congressional committee, it’s also quite obvious that […]
[…] they all imposed crippling tax hikes. Indeed, the tax increases in Greece were so severe that even the International Monetary Fund […]
[…] they all imposed crippling tax hikes. Indeed, the tax increases in Greece were so severe that even the International Monetary Fund […]
[…] According to some estimates, this “balanced approach” in this plan has $54 of tax increases for every $1 of spending cuts. That’s even worse than what’s been happening in Europe. […]
[…] According to some estimates, this “balanced approach” in this plan has $54 of tax increases for every $1 of spending cuts. That’s even worse than what’s been happening in Europe. […]
[…] qu'il s'agit d'une "approche équilibrée", mais cette vision est erronée. D’abord, comme Véronique de Rugy l’a montré, elle se traduit dans les faits par de nombreuses nouvelles taxes et très peu de restrictions de […]
[…] say that this is a “balanced approach,” but this view is misguided, First, as Veronique de Rugy has shown, it generally means lots of new taxes and very little spending restraint. Second, it is based on […]
[…] say that this is a “balanced approach,” but this view is misguided, First, as Veronique de Rugy has shown, it generally means lots of new taxes and very little spending restraint. Second, it is based on […]
[…] their idea of a “balanced approach” simply means higher taxes, as you can see from this shocking chart. Gee, what a […]
[…] but not least, here’s one showing that Obama prefers the European version of a “balanced approach” rather than the version I put […]
[…] but not least, here’s one showing that Obama prefers the European version of a “balanced approach” rather than the version I put […]
[…] Daniel J. Mitchell, depuis Washington D.C., États-Unis. Le mois dernier, j'ai partagé une stupéfiante illustration dévoilant que les hausses d'impôt comptent pour 90% de la soi-disant «austérité» en […]
[…] shared an astounding chart last month showing that tax increases account for 90 percent of the so-called “austerity” in […]
[…] shared an astounding chart last month showing that tax increases account for 90 percent of the so-called “austerity” in […]
[…] we ought to hear alarm bells. That’s the message Dan Mitchell of the Cato Institute is sending to those who take comfort in the notion of “balancing” spending cuts and tax […]
Dan!
Great piece. One quibble. the vast majority of Republicans won’t get “seduced,” they will gladly continue to join the spend-fest as they have for decades. To the contrary, it is important for us to not be seduced by Republican statements about fiscal responsibility and instead focus on their awful record, which too many conservatives try to rationalize because it is “better than Democrats.” Hope to see you again soon.
[…] from Daniel j Mitchell: […]