Pelosi begins the push for even more tax hikes
Last week, Politico ran a story noting that Democrats may finally be “done hiking tax rates” after scoring a victory through raising taxes on higher-income earners in the “fiscal cliff” deal. The story quoted a couple of House Democrats, including House Ways and Means Chair Sander Levin, who said that the issue seemed to be settled for now.
But according to House Minority Leader Nancy Pelosi (D-CA), the push for higher taxes isn’t over. During an interview with Bob Schieffer yesterday on Face the Nation, Pelosi said that more revenues are needed, presumably as part of any debt ceiling deal that Republicans hope to make:
Pushing back against the Republicans’ deficit-reduction strategy, House Minority Leader Nancy Pelosi (D-Calif.) said this weekend that more tax revenues – not just spending cuts – must be a part of Congress’s effort to rein in deficits.
Pelosi said the tax hikes in the recent “fiscal-cliff” deal are a start, but don’t go far enough to generate the revenues the government needs to run the country effectively.
“In this legislation we had $620 billion, very significant … changing the high-end tax rate to 39.6 percent. But that is not enough on the revenue side,” Pelosi told CBS’s Bob Schieffer in an interview taped Friday.
Without offering many specifics, the California Democrat said she wants to scour the tax code for unnecessary loopholes and “unfair” benefits that help those – either companies or individuals – who don’t need it.
“Put it all on the table and see what is working,” she said. “Frankly, I’m fairly agnostic about what it could be. … But, you know, if it works for us, if it grows our economy, if it’s something that justifies its existence, it should be there.”
Broadening the tax base by removing tax deductions and tax credits — spending in the tax code — isn’t a bad idea, in and of itself. For what it’s worth, that’s good tax policy; but only the Congress uses the anticipated revenue to lower overall taxes.
But the point being made by Pelosi shouldn’t surprise anyone. James Pethokoukis recently noted that the tax hikes passed as part of the “fiscal cliff” deal were only the beginning and he has pointed out that a 70+% tax rate seems to be the end goal for many on the political left.
Not only have Democrats expressed a desire for even higher taxes, Stephen Moore notes that, during the “fiscal cliff” negotiations, President Obama told Speaker John Boehner that Washington doesn’t have a spending problem. Take a second to pull your jaw up from the floor and then look at this chart from the Heritage Foundation to see how incredibly wrong Obama is:
Even if one were to write off the short-term budget deficts, the longer term picture is what is really troubling. The federal government currently spends around 24% of gross domestic product (GDP). Entitlements alone are around 10% of GDP.
According to the CBO’s alternative baseline scenario, entitlements will account for 16.6% of GDP by 2037. That’s just entitlements. Discretionary spending, including defense, is another 9.6% of GDP. Interest on the national debt adds in another 9.5%. By 2037, the government will spend 35.7% of GDP and the national debt will be nearly 200% larger than the economy.
Tell me again how spending isn’t the problem. Sadly, Obama and Pelosi are committed to turning the United States into a European-style welfare state — with heavy spending on social programs, oppressively high taxes, and tepid economic growth.