Shocking secret revealed: Taxing the rich can't pay for all of Obama's programs

First CBO tells us that nationalizing health care won’t actually be “deficit-neutral,” as The One has long and insanely claimed, and now this. Everything I thought I knew about economics has been proven totally, er, true.

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Normally it’d be a moral victory that the Times is even reporting this, but come on. Was there anyone so naive as to think they wouldn’t end up being shaken down by a utopian liberal with a Democratic Congress to do his bidding? Besides Christopher Buckley, I mean.

As these analysts recognize, taxing the rich has its limits both economically and politically, such that members of Congress are not likely to tap that well again and again…

Mr. Burman and others recall that in the creation of Social Security and Medicare, Presidents Franklin D. Roosevelt and Lyndon B. Johnson insisted that beneficiaries contribute through payroll taxes, both to finance the programs and to give all Americans a vested interest. The same philosophy should apply to seeking universal health coverage, they say.

“This idea that everything new that government provides ought to be paid for by the top 5 percent, that’s a basically unstable way of governing,” Mr. Burman said…

Administration officials recently began promoting a fallback. Rather than tax individuals, it would single out insurance companies that sell “Cadillac” plans. David Axelrod, a White House strategist, has described the proposal in populist terms, saying it would hit “the $40,000 policies that the head of Goldman Sachs has” and “not impact on the middle class.”

That position, analysts predict, cannot hold over time.

“There is no way we can pay for health care and the rest of the Obama agenda, plus get our long-term deficits under control, simply by raising taxes on the wealthy,” said Isabel V. Sawhill, a former Clinton administration budget official. “The middle class is going to have to contribute as well.”

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Note well: Burnam and Sawhill are Clinton veterans, not conservatives. They have no skin in this game except warning their party that a 57 percent combined marginal rate on top earners may, perhaps, result in some of those unintended consequences we dare not mention lest we be branded fearmongers.

No worries, though. The stimulus is working. The economy is recovering. All is well.

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