How President Obama will stick it to the middle class

Posted by: ST on October 1, 2009 at 10:21 am

Via James Pethokoukis at the Reuters “Political Risk” blog:

Does President Obama have a secret plan to raise taxes on middle-class Americans — and,well, pretty much everybody else — with a European-style, value-added tax? Actually, it’s not such a big secret. Connect the dots:

1) The joint statement from the just-concluded G20 Summit in Pittsburgh called for balanced global growth — which means Americans must spend less and save more and reduce its budget deficit.

2) That same weekend, John Podesta, co-chairman of Obama’s presidential transition team and an outside White House adviser, tells a Bloomberg reporter that a value-added tax is “more plausible today” than ever, adding that “there’s going to have to be revenue in this budget.” A VAT is a kind of consumption tax.

3) Yesterday, the Center for American Progress, the liberal think tank with close White House ties, holds a conference on the rising national debt. While speaker after speaker — Paul Krugman, Roger Altman, CAP President Podesta (again), Laura Tyson — admits entitlement spending must be reduced, they also agree that taxes must be raised. Altman suggests $400 billion in new tax revenue is needed almost immediately to calm financial market fears, and a VAT would be a great way of doing it. That’s $400 billion a year, by the way, not over ten years.

4) Also, yesterday was the first meeting of President Obama’s tax reform panel led by former Federal Reserve Chairman Paul Volcker. In a two-part interview with Charlie Rose airing yesterday and today, Volcker says that if Washington can’t get spending under control, either a VAT or a carbon tax would be effective revenue raisers. “Those are two big ones,” he says.

5) As they used to say in the Soviet Union, “It’s no coincidence.” This is also the conclusion of one Washington insider with ties to the White House economic team: “Does this all add up to a trial balloon? Of course, it’s a trial balloon. And I expect the administration will propose major tax reform, including a VAT.”

Obama’s campaign promise to not raise taxes on households making less than $250,000 a year was always considered a joke here inside the Beltway. It’s the economic “consensus” — and this was true even before the financial meltdown and recession — that rising entitlement costs would eventually mean a higher tax burden for the American people.

Maybe it was a joke inside the campaign, too. Since being elected, Obama has raised cigarette taxes and has advocated raising healthcare taxes, energy and small business taxes, in addition to corporate taxes. What’s more, economic advisers like Larry Summers seem eager to get rid of all the Bush tax cuts, not just those on so-called wealthy Americans.

It was also a “joke” to any thinking person who could see right through Obama’s phony pledge not to raise taxes on anyone making “under $250K.” Being a liberal Democrat and a strong proponent of “social justice” thanks to close long-term associations with Chicago leftist radicals like black liberation theology proponent Rev. Wright and unrepentant domestic terrorist Bill Ayers, there’s simply no way he could pursue the ambitious agenda he laid out last year without raising taxes on more than just “the rich.” As John Locke Foundation president John Hood writes:

I think that Obama’s tax pledge, by the way, did not determine the 2008 outcome (which became inevitable after the financial meltdown) but almost certainly attracted enough tax-wary independents to pad his winning margin and perhaps flip a couple of the close states. Will he and the Democrats in Congress risk a political backlash by trying to pass another big tax hike during some future session? In a word, yes. It’s an inescapable element of their broader political program, and they believe it’s the right thing to do. As with health care, they believe that whatever short-run political costs they must bear, they’ll be seen as heroes in the long run by moving America closer to the European-style welfare state they consider the necessary outcome of social progress.

Which is why they must be stopped, before it’s too late to reverse course.

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9 Responses to “How President Obama will stick it to the middle class”


  1. John Bibb says:

    A good analysis of the future tax increases coming soon. But the fools who voted for President Obama (PBUH) will wake up when they check out their paycheck stubs and see how much more has been taken out of their pay. Or when they go to the store and are forced to buy 10 percent less due to the VAT tax. Or when they do their taxes the first year after the ripoffs start. The Messiah and his minions will not be able to hide these “reality checks” from the stupid then.
    John Bibb

  2. Carlos says:

    And this is different from the direction the Republicans in charge were headed…how?

    I’m coming to the conclusion that the devil you know, the Democrats, is easier to fight and fend off than the one you don’t know (Republicans) because at least the donks are somewhat honest about it, as opposed to the liars like Bush (either one), McCain, Steele, etc.

    Politicians in this country from either party (for the most part) just can’t get it through their sugar plum-filled heads that there are, Constitutionally, no entitlements, and every time they vote a continuance of existing ones or creation of a new one it is washing more of the foundation of this country away and replacing it with sand, most often swamp sand or quicksand. But it’s much more important to buy votes with my money than to take care of the country that was entrusted to them.

    Vipers. The entire lot.

  3. in_awe says:

    Look for the VAT and Cap and Trade to go into effect in 2013 – just like Obama’s health care plan.

    That way he can claim to be held personally responsible for these economy and freedom crushing debacles once he is re-elected and is no longer at personal risk of actually being held accountable.

  4. Drider says:

    Well I know as far as the cigarette tax goes, it’s breaking my a**.

    I know, it is a filthy habit etc,etc,etc but I am hooked and now going broke,every pack I buy I comment that I hope that this would be the pack that put me in the hospital with a smoking related disease so I can at least feel like I’m recouping some of the tax dollars spent.

    I find myself wishing to sue the government for preying on me and breaking my piggy bank but oh well.

  5. Brontefan says:

    What about when Senior citizens realize they won’t be getting their COLA? :(

  6. Carlos says:

    As far as an “inside joke” on the campaign trail goes, he and his cronies, cohorts and fellowtravelers laughed all the way to the WH and are now snickering about the dufuses that still believe every lie that drools out of his often-walked-in mouth.

  7. Jo says:

    What can you say? Those of us who didn’t vote for the bitter, angry, narcissistic little empty suit are still the victims of his relentless march toward ruining the nation and turning it into a Socialist republic. Those with their hands out expecting the rest of us to pay their way have effectively voted themselves a hefty raise on the backs of our children and grandchildren. It’s a disgrace but I suppose it was inevitable when you look at the actions and mindset of those on the left.