It’s Happened! Democrats Have Finally Run Out of Other People’s Money

 

It’s not only the GOP that’s deeply divided these days. In a new Time magazine piece, “Hillary Clinton’s Middle-Class Tax Pledge Divides Democrats,” reporter Sam Frizell highlights a major fissure within the Democratic Party (italics mine):

Among the various policy ideas and position papers put out by Hillary Clinton so far in the Democratic primary, one stands out for its bumper-sticker simplicity: If your family makes less than $250,000 a year, your taxes won’t go up. … But behind that simple promise is a roiling debate within Democratic circles about the future of the party’s domestic agenda.

The no-new-taxes pledge is emblematic of the broader concerns about a Clinton presidency raised by the progressive side of the party. Critics say it is a crafty political move that would limit the ambition of proposals on everything from expanding Social Security to healthcare reform. It reinforces a long-running Republican argument that some would prefer to defeat head on. And, to put it simply, it makes it hard to pay for things Democrats want. …

More than half a dozen economists told TIME that while Clinton’s red line may be good politics in a general election, it is misguided policy that would limit her ability to work with Congress to enact a domestic agenda. They say that Clinton’s $250,000-threshold constrains her from proposing progressive items that might require broad tax increases and give her an arbitrary obstacle to negotiating a smart tax policy. “From the perspective of the progressive policies we actually need—not to mention the pressures on the fiscal budget in coming years—it’s a serious mistake to sign up to these thresholds as if they’re etched in stone,” said Jared Bernstein, chief economist for Vice President Joe Biden from 2009 to 2011.

“It’s not conceptually very different from Republicans who say they agree to the Grover Norquist pledge, ‘I will never raise taxes on anybody,’” said Roberton Williams, fellow at the Tax Policy Center, referring to the conservative activist who has pushed Republican lawmakers to sign a no-tax pledge. “Clinton just adds the clause ‘on the the middle class.’”

Smart progressives know the math. More government — free healthcare, free college, free preschool, free other stuff! — means more taxes — and not just on the 1%.

To pay for the government expansion that the Sanders-Warren left wants would require a middle-class tax hike, probably through a broad-based consumption tax like a VAT. Spend like Scandinavia, tax like Scandinavia. And as my colleague Alan Viard notes later in the Time piece, “As a long-run policy, I don’t think it’s viable for our country to say that we’re not going to raise taxes on people making less than $250,000.”

That is my baseline case as well. But that tax burden will need to be a lot bigger, with spending at the progressive/liberal/Dem scenario of 30% of GDP vs. limiting the rise to a few percentage points or so through smart entitlement reform. (And there are radical options to lower the government’s take.)

Look, do you know why you don’t see Democrats presenting long-term budget plans of the sort Paul Ryan has constructed? If they did, it would shatter the illusion that you can afford Big Government by taxing only hedge fund managers. As Bernie Sanders said the other day: “I believe that most Americans can pay lower taxes – if hedge fund managers who make billions manipulating the marketplace finally pay the taxes they should.”

Actually he surely knows that almost all Americans would need to pay a lot more to turn the US into a progressive paradise. But they are hiding that reality because it is a political loser, as Hillary Clinton surely knows.

So the progressive agenda has pretty much hit a wall. Calling for 1950s-era tax rates isn’t going to fly, nor are massive middle class tax hikes on a beleaguered middle-class. So I guess Democrats have finally run out of other people’s money. Or just about.

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  1. Dan Hanson Thatcher
    Dan Hanson
    @DanHanson

    They just need to get creative. For example, a carbon tax can raise a lot of money. We just got hit with one here in Alberta. Our progressive government, in classic Orwellian fashion announced that the tax will be revenue neutral – because all the money will be ‘reinvested’ in Alberta. In other words, taxing the people and then spending the money is now ‘revenue neutral’ – because there is apparently no difference between my spending my money for my purposes and the government taking it from me and spending it however they like.

    • #1
  2. Nick Stuart Inactive
    Nick Stuart
    @NickStuart

    When has keeping a promise to not raise taxes ever mattered to any Democrat (or most Republicans for that matter) after getting elected?

    • #2
  3. The Reticulator Member
    The Reticulator
    @TheReticulator

    Why couldn’t she just lie about it?  Like she does about everything else?

    • #3
  4. The Reticulator Member
    The Reticulator
    @TheReticulator

    Dan Hanson: Our progressive government, in classic Orwellian fashion announced that the tax will be revenue neutral – because all the money will be ‘reinvested’ in Alberta.

    I’m in favor of net-zero carbon taxes.  But thanks for the warning that the lefts are willing to redefine the term “net-zero” (or “revenue-neutral”).

    Maybe they could redefine the terms tax increase and tax cut, too.   Define higher taxes to mean tax cuts, and redefine tax cuts to mean higher taxes.

    I think the bottom line is that we should never, ever believe what the left says about anything.

    • #4
  5. civil westman Inactive
    civil westman
    @user_646399

    At the rate things are going with both domestic and imported dependents i.e. an ever-increasing Dem constituency (along with ever more government employees) it won’t be long before all paychecks will go directly to the government which will then issue us an allowance, whose size will depend on the degree to which one is politically correct in all one says and does. That sure sounds like paradise. What, me worry?

    • #5
  6. Hoyacon Member
    Hoyacon
    @Hoyacon

    The Reticulator:Why couldn’t she just lie about it? Like she does about everything else?

    You might be able to make some big $$$ as a consultant to the Clinton campaign. :)  On the other hand, Huma’s probably figured this out as well.   If the 2016 version of this “no new taxes” pledge sees the light of day, expect a Clintonian “it all depends on what the definition of taxes is.”

    • #6
  7. Frozen Chosen Inactive
    Frozen Chosen
    @FrozenChosen

    Her husband lied about tax cuts for the middle class in 1992, there is nothing to stop Hillary from similar lies about tax increases.  Obama lied about middle class tax increase as well.

    • #7
  8. civil westman Inactive
    civil westman
    @user_646399

    anonymous:

    James Pethokoukis: That is my baseline case as well. But that tax burden will need to be a lot bigger, with spending at the progressive/liberal/Dem scenario of 30% of GDP vs. limiting the rise to a few percentage points or so through smart entitlement reform.

    So, Americans will only be enslaved to the Federal government to the extent of 30%: having nearly one third of their lifetime earnings confiscated and sent to the imperial capital to be redistributed to those who do not work and showered upon those who serve the imperium?

    Well, I guess that’s better than having, say, 1/3 of the population enslaved 100%, Oh wait, the slave population of the U.S. was never close to 30%—in the 1860 census, it was 12.6%.

    Well, love it or leave it. Oh wait, if they claim you owe back taxes, they can revoke your passport and keep you from leaving the country.

    The land of the flee.

    • #8
  9. Dan Hanson Thatcher
    Dan Hanson
    @DanHanson

    Maybe they could redefine the terms tax increase and tax cut, too. Define higher taxes to mean tax cuts, and redefine tax cuts to mean higher taxes.

    They already did that.  Tax cuts are now called “expenditures in the tax code”.   So cutting is spending.

    What else?

    • Consumption is growth.
    • Government spending is ‘stimulus’.
    • Letting you keep your own money so you can spend it on what you choose is ‘austerity’.
    • A tax increase below the baseline tax increase already planned is a ‘tax cut’.
    • ‘Infrastructure’ spending includes raises for public union workers (we just had one of those, too).
    • Raising the cost of energy will grow the economy,  because of ‘green jobs’.

    I could go on, and on, and on…

    I think the bottom line is that we should never, ever believe what the left says about anything.

    Of course not.  The left has always used language as a weapon.  That was already common knowledge when Orwell wrote 1984.

    I’ve already heard people on the left defining people who save their money as ‘hoarders’.  Watch as that term becomes more common if the left decides to start going after 401(k)s and other private savings,  as some left-wing thinkers are now arguing for.

    Sometimes it feels like we’re now living inside an Ayn Rand novel.

    • #9
  10. Randy Weivoda Moderator
    Randy Weivoda
    @RandyWeivoda

    anonymous:

    Dan Hanson: Sometimes it feels like we’re now living inside an Ayn Rand novel.

    Indeed. I have read Atlas Shrugged three times: first in 1968, the second time in the late 1970s, and most recently in 2010. The first time its view of the future seemed implausible given the wild optimism of the Sixties. The second time, I saw the downward trajectory in place, and a number of the things forecast already having occurred. By 2010, the splice between fiction and reality was about 40% of the way through the novel. I’d have to go back to see how much it has advanced in the last five years.

    Every time I read about another corporation being nationalized in Venezuela I fantasize about the scene in Atlas Shrugged where the oilman lights his oil fields on fire and leaves a note for the government, saying something like “OK, you can have it now.”

    • #10
  11. HVTs Inactive
    HVTs
    @HVTs

    Frozen Chosen:Her husband lied about tax cuts for the middle class in 1992, there is nothing to stop Hillary from similar lies about tax increases. Obama lied about middle class tax increase as well.

    In fact, if memory serves, it was exactly the same claim . . . less than $250K, no problem—Barry has your back.  Then it sort of jumped around . . . different spokesmen used different thresholds.  It was a known untruth. “Democrat” is just another way of saying “gaslighting.”  It’s sort of cute that Progs are making like Obillary has any intention of holding taxes constant for fat cat quarter-millionaires.  Democrat Primary voters might actually be gullible enough to believe it.

    • #11
  12. The Reticulator Member
    The Reticulator
    @TheReticulator

    Hoyacon:

    The Reticulator:Why couldn’t she just lie about it? Like she does about everything else?

    You might be able to make some big $$$ as a consultant to the Clinton campaign. :) On the other hand, Huma’s probably figured this out as well. If the 2016 version of this “no new taxes” pledge sees the light of day, expect a Clintonian “it all depends on what the definition of taxes is.”

    Well, when her hubby was elected, he was shown some budget numbers and then announced that he had no idea, so he wouldn’t be able to cut taxes after all.

    Here is how the New York Times ran interference for him.

    The Democrats who are speaking against Hillary’s promise are doing nothing but running interference for her so she can break her promise as soon as she takes office. They’ll have her back when she does.

    The Clintons have been through this before. They can do it in their sleep.

    • #12
  13. James Gawron Inactive
    James Gawron
    @JamesGawron

    Jim P,

    Socialism is Feudalism without the Chivalry. How to destroy the most productive system mankind has ever experienced.

    Thanks Democrats.

    Regards,

    Jim

    • #13
  14. Metalheaddoc Member
    Metalheaddoc
    @Metalheaddoc

    Frozen Chosen:Her husband lied about tax cuts for the middle class in 1992, there is nothing to stop Hillary from similar lies about tax increases. Obama lied about middle class tax increase as well.

    Yeah. We have heard this lie before from both sides. Remember “read my lips…”

    Of course, Hillary won’t raise “taxes” on those under 250k. She will increase penalties, fees, costs, sacrifices, investments, revenues,  fair-shares, etc. It just won’t be called a “tax”.

    • #14
  15. Israel P. Inactive
    Israel P.
    @IsraelP

    The $250,000 thing is a ploy. No one will be surprised when she changes her mind because of “unforeseen developments.” Nor will anyone be surprised when she says afterwards that she kept her promise.

    • #15
  16. The Reticulator Member
    The Reticulator
    @TheReticulator

    Metalheaddoc: Of course, Hillary won’t raise “taxes” on those under 250k. She will increase penalties, fees, costs, sacrifices, investments, revenues, fair-shares, etc. It just won’t be called a “tax”.

    She will do all of the above, and she will call some of it taxes, too.  It’s a way to test the loyalty of her followers.  Those who don’t agree that she kept her promises will be cast out into utter darkness, where there is weeping and gnashing of teeth.

    Well, maybe not, given that that place is their central headquarters.

    • #16
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