The 2% Illusion
02/26/09 - Online.WSJ.com OpinionJournal
Take everything they earn, and it still won't be enough.
[edited] If taxes took 100% of the taxable income of everyone earning over $500,000 in 2006, this would have given Congress an extra $1.3 trillion in revenue. That's less than half the 2006 federal budget of $2.7 trillion, and only one-third of the $4 trillion Congress will spend in fiscal 2010.
Taking every taxable "dime" of those earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.
The bottom line is that Mr. Obama is selling the country on a 2% illusion. Unwinding the U.S. commitment in Iraq and allowing the Bush tax cuts to expire can't possibly pay for his agenda. Taxes on the not-so-rich will need to rise as well.
Mr. Obama's climate-change plans will hit all Americans with higher expenses. Selling cap-and-trade permits to emit greenhouse gases amounts to a steep new tax on most types of energy and so on all Americans.
Mr. Obama portrays his agenda as center-left pragmatism. But pragmatists don't ignore the data. The only way to pay for Mr. Obama's ambitions is to reach deeper into the pockets of the American middle class.