Congressman Jerry McNerney (D-California) has advocated raising marginal tax rates to 90 percent. Such a tax increase on the wealthy would be necessary, but not sufficient, to pay for the vast spending increases proposed by the Obama Administration, if it is to keep its promise not to raise taxes on those making less than $250,000 per year. Indeed, it would not raise enough money, since there simply are not enough wealthy people to pay for all the proposed spending.
In the National Journal, the disillusioned centrist Stuart Taylor, who once praised Obama, notes that Obama's budget projections are based on bogus accounting, and would result in mushrooming deficits as far as the eye can see unless taxes are raised radically. Obama, he writes, "has been deceptive in basing his deficit projections on phantom expenditure cuts and wildly optimistic revenue estimates." Moreover,
"The numbers don't add up -- and still won't if and when, as seems almost certain, Obama ratchets up his so-far-fairly-modest new taxes on the top 2 percent. 'A tax policy that confiscated 100 percent of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue,' according to a February 27 editorial in The Wall Street Journal. 'That's less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable 'dime' of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.'
As for the budget's $2 trillion in projected net "savings," Obama's budget director, Peter Orszag, admitted in testimony on Tuesday under questioning by Rep. Paul Ryan, R-Wis., that $1.6 trillion comes from phantom cuts of the money that would be needed to sustain the troop surge in Iraq for another decade -- money that nobody ever intended to spend.
Other supposed savings -- especially from Medicare -- seem unlikely to materialize absent benefit cuts, which Obama has not proposed. And the cost of any health care legislation -- to be drafted largely by a Congress that is allergic to the kind of cost-cutting necessary to make universal care sustainable -- is likely to be two or three times the $634 billion over 10 years that Obama has budgeted."
Ironically, even as Obama advocates raising taxes on families making more than $250,000 per year, he bails out irrresponsible, high-income mortgage borrowers, even if their current mortgage payments are not high. His $75 billion-plus mortgage bailout, announced last week, reduces borrowers' mortgages even if they have big homes (covering mortgages up to $729,750) -- and even if their mortgage payment is not high (they can qualify if their mortgage, plus property taxes and insurance, amounts to as little as 32 percent of income -- less than many responsible homeowners have long paid on their mortgage).
Obama's bailouts reward the irresponsible rich, even as his proposed tax increases would punish thrifty high-income households by increasing their capital gains and income taxes, and raise taxes on the small businesses that create most of America's jobs. Bush launched a war on terror. Obama has launched a war on thrift and American investors.
Since Obama signed the bloated $800 billion stimulus package into law, the stock market, a leading economic indicator, has plunged like a stone. (The Congressional Budget Office predicts the "stimulus" will actually shrink the economy in the long-run). Investors are spooked, as Stanford University economist Michael Boskin notes in his Wall Street Journal column, “Obama’s Radicalism Is Killing the Dow.” Another commentator notes, “In less than 50 days, Obama has spent more than three times the cost of the entire Iraq War so far. This year, he will more than triple the largest deficit of the Bush era.”