Second look at tax hikes on everyone?

posted at 7:41 pm on November 29, 2012 by Allahpundit

Lottttt of support in the comments to the last thread for the “let it burn” option. Here’s a variation on it from Jim Geraghty that I kinda like, just because it would force the public in the starkest way to face the consequences of a metastasizing entitlement state:

At this moment, Republicans in Congress need to examine which presents a more dire threat to the country:

A) A double-dip recession driven by the sequester and the expiration of the Bush tax cuts, or

B) the public’s belief (verified through polling) that our giant debt, our ticking time bomb of entitlements, and our gargantuan government can be solved by “asking the richest Americans to pay a little bit more,” as Obama insists.

Option A is terrible, but Option B is the giant locked door blocking all of the real solutions.

So if we must have tax hikes, let the tax cuts for every income level expire and let everyone of every income level pay higher taxes. Destroy the illusion among so many voters that they can get all the government they want without paying more in taxes.

You want to continue putting off reforms to Medicare and Social Security while making only token cuts to the rest of the budget? No problem. But if we can’t have fiscal responsibility on the front end, by cutting spending, then we’ll have some measure of it on the back end by squeezing a ton of new revenue from the middle class. Everyone in government understands that the rich can’t pay for all of this; if you want to keep the popping-and-wheezing Great Society machine duct-taped together for a few years longer, you’ll need to start soaking average Americans. Democrats would prefer a VAT because it can disguise future tax hikes better, but one way or another Joe Sixpack has to start meeting his obligations. The GOP can make it happen on January 1 simply by walking away.

This isn’t a true “let it burn” plan. “Let it burn” calls for giving Obama whatever he wants so that he can’t blame Republicans for anything that happens later. That would mean hiking taxes on the rich and no one else because O’s not — yet — at the point of informing the middle class that they’ll have to pay more to enact his agenda. By contrast, if the GOP followed the Geraghty plan and let tax hikes on the middle class take effect, O would merrily blame them for it while privately rejoicing that the Overton window had been moved back towards higher rates on working-class Americans. Likely end result: The GOP would be brutalized in the midterms, no doubt with some Democrats campaigning on a plan to (temporarily) lower the new middle-class rates if elected in exchange for even higher rates on the rich — and no entitlement reform, of course. But Geraghty realizes all that. He’s playing a long game of “let it burn” here: At some point, Democratic tax-and-spend policies will squeeze so many people and cause so many problems that the public will revolt and turn back towards Republicans with a mandate to undo it. The “blue social model,” in Walter Russell Mead’s term, will eventually collapse because the left ultimately can’t make the math add up. But how long are you willing to wait? The public’s belief in soaking the rich as a solution to core budgetary problems is one of the sturdiest in American political life, rivaled only by their belief that defense spending and foreign aid are something like four-fifths of the federal budget or whatever. Democrats will put off the reckoning on entitlements as long as they can, until a Grecian debacle finally forces their hand. (That’s the flaw in my own fiscal-cliff strategy, of course. I said the GOP should offer tax hikes on the rich in exchange for immediate entitlement reform. But why would Obama agree to that when he knows the public is kidding itself about both parts of that equation?) Are you prepared to wait that long for a mandate to fix it? Through how many electoral cycles should the “let it burn” strategy be carried out (and why vote for a Republican committed to that strategy in 2014 instead of a Democrat)? Is it worth watching lopsided Democratic majorities in Congress pass single-payer health care in the interim?

The fact that the entire “fiscal cliff” clusterfark revolves around taxes instead of entitlement reform is proof enough of how deep the denial runs here. If you follow the “let it burn” approach on the assumption that the public will finally wake up and reach for the fire hose when it feels a little heat, before everything burns down, then you have more faith in the public than I do. Reminds me a little, in fact, of the assumption that a “starve the beast” approach to taxes would eventually force government to shrink. Not so, as it turns out: The beast doesn’t starve, it just borrows and continues to gorge. That’s how we got here. And on that note, enjoy insane person Jay Carney insisting that it’s “deeply irresponsible” to want spending cuts as a condition of raising America’s debt ceiling ever onward to infinity. Click the image to watch.


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