We have spent so much more than we have for so long that spending cuts alone probably will not be sufficient to eradicate our deficit, our debt, and fund our future entitlement programs. While we should certainly try to fix the problem just by cutting spending, it’s almost a certainty that we’re going to have to increase taxes at some point to prevent defaulting on our obligations. — John Hawkins, 5 Somewhat Unpleasant Assumptions I Make About Taxes, July 13, 2011
One of the most quoted statistics on the Right over the last election cycle has been that 47% of Americans pay no income taxes. Many conservatives have noted the obvious, that it’s not healthy for the country that so many Americans are getting benefits from the government without paying for what they’re receiving. However, there’s a political implication to that number as well: Income tax cuts mean nothing to these people since they’re already not paying any taxes. Meanwhile, 8 of the 10 wealthiest districts in America voted for Obama over Romney. So politically, the benefits we’re getting out of pushing for tax cuts at this point are extremely minimal.
On a related note, when we’re talking about tax increases on the wealthy, Democrats have won that issue with the public — and no wonder.
Think about it from the perspective of the average person.
The economy is bad and people are nervous about their economic future, but they’re also worried about the country because conservatives like us have been telling them that the country is on the cusp of a historic debt-related crisis which the Democrats claim taxes on the rich will fix. Additionally, they’re not being asked to pay anything and they figure the rich, by virtue of the fact that they’re rich, are doing well. So, the American people are fine with increasing taxes on the wealthy. Moreover, the Democrats are using the fact that Republicans oppose tax increases on the wealthy to avoid cutting spending. As a practical matter, IT WILL BE IMPOSSIBLE to reduce the deficit without agreeing to some tax increases.
Now, is increasing taxes on the wealthy good economic policy? No.
Is it good for the country? No.
Given that we already have the most progressive income tax system in the Western world, does it make sense to make it even more progressive? No.
Does it make sense to increase taxes when the economy is in the toilet? No.
However, the simple political reality is that fighting tooth and nail to make sure the rich don’t pay another dime in taxes in a political loser. It’s time to accept that.