President Obama claimed on Friday that his re-election gave him a mandate to increase taxes on those earning more than $250,000 a year because the majority of Americans agree with my approach.
But how can he know?
The presidential election covers, after all, a whole range of issueshow can the president know which put him over the top?
Was it actually his plan to implement a more progressive tax policy, or was it a perception that access to abortion would be more secure; was it his aggressive foreign policy, including a surge that has resulted in tripling civilian deaths in Afghanistan, as well as expanded drone attacks elsewhere; was it a desire to make sure Obamacare is implemented as passed; was it an expectation that immigration restrictions would be loosened despite his far more aggressive deportation policy over the past four years; or a hope to see green energy subsidies expandedor perhaps one or more of the myriad of other issues raised over the course of the campaign?
A vote is rather like choosing between two of those mixed-up baskets on the Food Network show Chopped. Suppose one contains Spam, spinach, Velveeta, eggs, and a Napa Cabernet; and the other holds canned tuna, kale, brie, challah, and Belgian beer. Even if I much prefer brie over Velveeta and despise Spam, I might still choose the first basket, figuring I can live on spinach omelets and Cabernet, and disregard the rest. However, someone knowing only which basket I chose may easily and wrongfully conclude I want more Spam and Velveeta.
Tuesdays exit polls similarly reveal a less-than-robust mandate for the president and his policies: 63 percent of voters said taxes should not be raised to cut the deficit, and contrary to Mr. Obamas perception, a minority47 percentexpressed support for raising taxes only on those making more than $250,000, with an additional 13 percent agreeing to increased taxes for everyone. Even his signature piece of legislation, Obamacare, lacks popular support: 49 percent of voters said Obamacare should be repealed, with only 44 percent opposing its repeal. And his disapproval rating of 46 percent would have spelled doom in any prior election year. Mr. Romneys even lower appeal was the presidents saving grace.
Democracy has famously been characterized as two wolves and a sheep voting on whats for dinner, and if anything, it is surprising that only 47 percent express support for raising taxes on high earners. However, even if a majority did agree with more progressive taxes on those making $250,000 and above, as a former instructor in constitutional law, President Obama certainly knows that our Constitution formed a Republic, not a democracy. Thus, our elected representatives are tasked with creating policy that will actually resolve the serious economic problems facing the country.
As 63 percent of voting Americans apparently know, raising taxes will not pluck our economy from ruin. The president himself is well aware of the danger of raising income taxes, and famously declined to do so two years ago at the risk of deepening the recession. In fact, even totally confiscatory tax rates on upper-incomes would not solve the huge and growing gap between federal revenues and spending.
Thus, if the president is truly concerned about students and seniors and middle-class families having to pay down the deficit, the best approach he could take is to stop growing the deficit. At current rates of spending, paying interest on the national debt will itself consume the lions share of the lifetime taxes facing the typical 35-year-old, middle class earner.
And of course, paying interest on the national debt is paying the bill for the goodies we already boughtproviding no current benefit to those future taxpayers left holding the bill.
Like wily alcoholics trying to delay rehab, the last time Congress couldnt pass a budget, it instead set up a seemingly inescapable quandary that would, finally, force their successors to be disciplined: the much-ballyhooed impending sequester. Providing mandated spending cuts across the federal budget, including a $55 billion reduction to the Pentagons budget in 2013, cuts in payments to physicians participating in Medicare, as well as cuts to FEMA, the Department of Education, and morein short, a mix of cuts to programs most favored by both sides of the aislethe sequester was a clear, desperate attempt to force bipartisan agreement on the next Congress by elected officials who couldnt themselves reach such consensus.
How about calling their bluff? Let the sequester take effect! The result would cut a relatively minor $109 billion from the currently projected 2013 budget of $3.803 trillionreducing the budget to $3.694 trillionslightly lower than this years budget of $3.796 trillion, but higher than the 2011 budget. Does anyone really think that level of spending would portend an end to life as we know it?
Students, seniors, and the middle class are well familiar with the concept of living within ones means, and cutting back when things are bad. Rather than pretending that Mr. Obamas optimistic projections of $65 billion gained under his tax hike would forestall another years trillion-dollar deficit, lets make Washington face facts and start weaning the Pentagon and Imperial City pols from their wastrel ways.
|Mary L. G. Theroux is Senior Vice President of the Independent Institute. Having received her A.B. in economics from Stanford University, Ms. Theroux is Managing Director of Lightning Ventures, L.P., a San Francisco Bay Area investment firm, and Vice President of the C.S. Lewis Society of California.|