Obama's 2% Illusion

Obama proposes a tax increase on the rich but promises households making less than $250,000 won't be touched, tax-increasewise:

President Obama has laid out the most ambitious and expensive domestic agenda since LBJ, and now all he has to do is figure out how to pay for it. On Tuesday, he left the impression that we need merely end "tax breaks for the wealthiest 2% of Americans," and he promised that households earning less than $250,000 won't see their taxes increased by "one single dime."

This is going to be some trick. Even the most basic inspection of the IRS income tax statistics shows that raising taxes on the salaries, dividends and capital gains of those making more than $250,000 can't possibly raise enough revenue to fund Mr. Obama's new spending ambitions.

Class envy plays well - if it weren't for all those rich, greedy people out there, the rest of us could afford to have nice things - but in this case, it's no solution. As the WSJ points out, even if Obama confiscated 100% of earnings over $250,000, it wouldn't be enough. Sure, the rich should pay more tax - they already do, with most tax breaks phasing out at the higher levels. (One person's tax break is another person's tax loophole.) The point is, how much is enough?

Obama just just signed into law a huge stimulus package with little worry of how to pay for it. We need the stimulus package so we can't be bothered about these details like how we'll pay for it. (Me, I'm of the belief that deficits don't really matter, or, at least, they don't matter as much as tax rates, so we should decide on what we need to do then do it. We wouldn't be looking at the price tag if we had to go to war. Why start now?) Apparently, we don't need universal health care because now Obama wants to be fiscally responsible. To do that, he doesn't mind playing the class card.