Why Rush Limbaugh should back ginormous tax increases now

posted at 2:51 pm on December 6, 2012 by Karl

One of Rush Limbaugh’s favored rhetorical devices is demonstrating absurdity by being absurd, perhaps most infamously with his 1992 endorsement of Bill Clinton for president. One of his occasional guest hosts, Mark Steyn, recently mused that House Speaker John Boehner might want to urge Americans to pay for the government they demand — but Steyn did not flesh out the notion, recognizing that Boehner would never do it. El Rushbo has a big megaphone and draws enough establishment media attention to warrant going Full Mondale.

After all, in the current “fiscal cliff” political theatrics, Pres. Obama and the Democrats are demanding the GOP agree to tax rate increases, while dismissing any proposal to reform entitlement spending. The conventional wisdom is that the GOP has little leverage because entitlement spending was not made part of the spending “cuts” that will be triggered in the absence of a deal. Moreover, some in the GOP are probably happy enough with a situation where — with automatic tax increases already in place — they can vote for tax cuts for the 98 percent while Obama wins a round of class warfare.

So why not go Full Mondale? If the Democrats want to increase taxes and leave entitlements unreformed, why not propose that the federal government raise the taxes necessary to fund these purportedly essential programs?

Indeed, Rush could offer several alternative tax increase plans to address our looming entitlement crisis. For example, based on projections from the Social Security Administration and Medicare’s actuaries, we could raise Social Security takes 28 percent (from 12.4% to 15.57%) and roughly triple the the Medicare tax (from 2.9% to 9.2%).

Of course, these are hikes in payroll taxes, which are regressive, and thus might be objectionable to progressives. Rush could propose to pay for Social Security, Medicare and Medicaid shortfalls though our progressive income tax. Funding promised benefits under these programs would require raising the 35 percent income tax bracket to at least 77 percent and the 25 percent tax bracket to at least 55 percent.

Then again, that idea could be blamed on the Heritage Foundation, which just might be too conservative for Democrats to accept. Accordingly, Rush could offer a plan based on a report from Third Way, a Democrat-affiliated group, adding a bipartisan flavor to the proceedings. According to Third Way, we could stabilize our deficit problem by taking just four ginormous steps. Step One is a familiar tune:

In 2013, soak the rich, Obama-style. Raise the top two tax rates, on ordinary income over $250,000 a year for joint filers, to Clinton-era levels (39.6% and 36%). Raise the top capital gains rate by 5 percentage points (to 23.8%). Tax qualified dividends as ordinary income. Reduce the value of exemptions and deductions for wealthy taxpayers. Restore the estate tax to its 2009 level (a top rate of 45% and exclusion of $3.5 million). Impose the Buffett Rule, requiring all earners of over $1 million to pay at least 30% in taxes.

However, if you cross all these items of the Democrats’ current wish list, the national debt will still double by 2035. So we need Step Two:

In 2015, increase the cap for the Social Security payroll tax to from $107,000 to $170,000 (and adjust for wage growth), then increase the payroll taxes for Medicare by about a third (by raising the rate from 2.9% to 3.9%).

However, these first two steps only push the annual deficit to 3% of GDP through 2019, at which point unreformed entitlement spending explodes the debt again. Thus we move to Step Three:

In 2019, increase all tax rates on ordinary income 5 additional percentage points, phased in over 10 years. Increase both tax rates on capital gains 10 percentage points (to 20% and 33.8%), phased in over 5 years.

Sure, we are really biting the middle class at this juncture, but we cannot reform entitlements, remember? Even so, these across-the-board tax hikes only contain the deficit through 2022. Thus, we move to Step Four:

Impose a 10% national value-added tax, phased in over 5 years.

At this point, America’s Euro-style welfare state finally gets Euro-style funding, and the national debt begins to decline slowly. All we need to do is increase taxes on the median-income family by sixty percent.

Rush Limbaugh, by backing this absurd plan and urging the GOP to propose it, can do what the establishment media will not do on its own: force a discussion of the cost of the Democrats’ policy of denial on entitlement spending. Since the election, the right has been reengaging the debate over whether “starving the beast” of tax revenue has been effective in containing the growth of government. Although there is little indication it has, the Weekly Standard’s Andrew Ferguson argues that the failure of the “starve the beast” strategy does not mean that raising taxes will cause the public to sour on big government.

However, one of the few silver linings to Obamacare may be that it was a test case in this debate. Public opinion polling of Obamacare consistently showed that the supposed benefits were popular, but the mandate was not — and that this tipped the balance of opinion against Obamacare as a whole. Indeed, a majority of Americans now say it is not the federal government’s responsibility to make sure all Americans have healthcare coverage.

In short: lunch is popular; paying for lunch is much less so. The GOP can oppose tax increases, but deficit spending is tax increases, as surely as Soylent Green is people. These tax increases will arrive in future legislation, and probably also in the form of inflation (which Ronald Reagan called “the cruelest tax“) to devalue our debt. Rush Limbaugh, by proposing an absurdly large slate of tax increases, can demonstrate the absurdity of what we are already doing, and what the Democrats demand we do in perpetuity.


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