” President Obama turned up on NBC’s “Meet the Press” for the first time since the passage of ObamaCare, and gave exactly the performance that every veteran Obama-watcher would have expected: a bitter, intransigent partisan claiming to be the only non-partisan, non-ideological participant in the “fiscal cliff” drama. “I’m not driven by some ideological agenda – I’m a pretty practical guy,” he explicitly stated, offering his past four years in office as evidence.
“They say that their biggest priority is making sure that we deal with the deficit in a serious way, but the way they’re behaving is that their only priority is making sure that the tax breaks for the wealthiest Americans are protected. That seems to be their only overriding, unifying theme,” the President lied shamelessly about his Republican opponents, breezily ignoring all those calls for genuine fiscal responsibility and spending restraint from the other side of the aisle. No one who has spent more than ten seconds actually listening to Republicans talk about the fiscal cliff could fairly conclude that opposing “tax breaks for the wealthiest Americans” is their only theme. The tax increases Obama keeps demanding won’t have any serious effect on the federal fiscal crisis – even if you’re gullible enough to believe that Obama would become the first Democrat in modern history to actually spend every nickel of a “deficit reduction” tax increase on reducing the deficit, the rosiest scenario for the biggest tax hike he’s called for would not even chip 15 percent off the ten-year projected deficit. But the President is banking heavily on the idea that, between the bully pulpit of the Presidency and the bias of an activist media, few in the public are going to spend ten seconds listening to any Republicans. “
” The problem is it’s not true. Raising taxes only makes things worse. The vintage conservative nostrums about higher taxes reducing revenue and enervating economies still hold.
Look at Great Britain where former Prime Minister Gordon Brown pushed through a tax hike shortly before voters booted him in 2010. Wealthy earners saw their rate increase from 40% to 50%. The top rate for capital gains also shot up 10%.
The results have been catastrophic for Britain’s economy. In 2010, there were more than 16,000 people in Britain declaring income of 1 million pounds or more. With Brown’s new taxes, that number dropped to just 6,000 as the wealthy either left Britain or trimmed their income to avoid taxation. Earlier this year, under Conservative Prime Minister David Cameron, the government announced it would drop that rate from 50% to 45%. Since then, the number of residents declaring 1 million pound incomes is up to 10,000.
Higher tax rates lead to fewer millionaires; lower tax rates lead to more millionaires. It’s as clear an illustration as you’ll ever see. And far from increasing revenue, Brown’s tax burden actually cost the treasury 7 billion pounds. Britain’s economy has stalled since Conservatives took power, leading various Krugmanians to reflexively scream “AUSTERITY!” every time they hear an English accent. Britain’s recession is complicated but one of its real causes is surely “TAXES!” “
Illustration By Gary Varvel