Dear Weekend Jolter,
We should probably talk some more about the dress.
You know the one, of Chick-fil-A color scheme and in-your-face situational unawareness. This newsletter is referring, of course, to AOC’s outfit. (Apologies if you’re all dressed-out by now.)
To walk things back a skosh, AOC likely knows full well what she’s doing and is situationally quite aware. She must get the hypocrisy of flaunting the words “Tax the Rich” on her dress at this week’s $35,000-per-head Met Gala. It’s a troll. She went all in, for the sake of the message.
But that message does help crystallize the thinking behind the ungodly sums in Democrats’ spending bills, which is why we should talk about it.
“Tax the Rich” is hardly a new idea. Before 1981, it was the policy of the U.S. government. The thinking goes that if only we can do that again, at that level or higher, any amount of spending can be covered. So let it rip.
If the investments Washington contemplates were on the level of, say, a small war, perhaps that would be true. But they are decidedly not. The Tax Foundation, a couple years ago, looked at one AOC proposal to tax incomes over $10 million at 70 percent Over ten years, this wouldn’t close a single year’s deficit — even at pre-pandemic levels — and probably wouldn’t cover a single year’s interest payment on the debt, let alone a $3.5 trillion budget bill. Nevertheless, this past week, House Democrats released an extensive tax plan that generally adheres to that same slogan — complete with higher individual, capital-gains, and corporate tax rates. It’s estimated to raise over $2 trillion. It’s still not enough.
NR’s editorial succinctly addresses this shortfall:
House Democrats have put forward a worst-of-both-worlds tax proposal: punishing enough to do real damage to the U.S. economy and individual households, but not nearly enough to pay for the trillions upon trillions of dollars of new spending Joe Biden and his congressional allies have put into play.
What we’ve got here is a failure to elucidate. Politicians have convinced themselves, or maybe just their base (Kevin Williamson, for one, sees little evidence of sincerity here), that taxing the rich, while taking pains to spare the middle class, will pay for their promises. But it would in fact take middle-class tax hikes — fairly large ones — to pay for their agenda. They would need to go full Europe, as Rich Lowry explains:
This is where the Democrats are willing to talk the talk about a cradle-to-grave welfare state, but not walk the walk. There can be no European-style welfare state, at least not sustainably so, without European-style taxes.
The dirty secret about the Scandinavian countries that the Left constantly holds up as a model is that they aren’t afraid to tax the middle class. These alleged models of social justice tax more than we do and tax much more broadly, realizing that taxing the rich and corporations isn’t enough to fund extensive and generous social programs.
Jay Nordlinger puts it thusly: “If you want more revenue for the government — and we can debate that — you’re going to have to look to the multitudes: to the Great Middle. But no one wants to say that.” Brian Riedl does some math and comes to an alarming conclusion: “Using up all the ‘tax the rich’ options for the president’s new proposals would leave the wealthy unable to close the underlying — and unsustainable — $112 trillion in baseline deficits over the next 30 years, or finance progressive fantasies such as Medicare for All and the Green New Deal.”
NR’s editorial also notes that the proposal’s tax hikes on businesses would be felt by employees and customers alike, many of whom reside in that hallowed middle class.
Could the rich pay more? Sure, they could, and this writer would wholeheartedly support this as part of a comprehensive plan to balance the budget. [pauses to laugh hysterically, then regain composure] Anyway, David Harsanyi helps illuminate why this tactic yields diminishing returns, owing to the fact that the wealthy are covering a good deal of federal outlays already. And David gets at the nut of the problem, which incidentally is the premise of this newsletter:
The reality is that no politician is going to advocate raising middle-class income taxes, despite the ever-increasing cost of government. There is only the rich to tax. Consequently, it’s become easier to pass massive expansions of the state. Everyone expects someone else to foot the bill — either future generations or their wealthier neighbors.
Tax the Working Man doesn’t have the same visceral appeal. But Tax the Rich? That’s a slogan that keeps hope alive, and the money flowing. It suggests there’s a dollar match for every dollar of need out there. And conveniently for the sloganeers, the subtext once that imperative accompanies a massive spending proposal is that any opposition reflects a craven and mulish refusal to hit the plutocrats in their George Costanza wallets. So say it loud.
Green New Deal? Tax the Rich. Medicare for All? Tax the Rich. Canada’s got problems? You’d better believe, Tax the Rich.
It’s the slogan that justifies anything and everything. It is, without question, way better than Drill, Baby, Drill. No wonder AOC donned it. She’ll probably be invited back.