I missed President Obama's speech Tuesday (had a prior commitment and how dare he not plan his speeches around my schedule?) but apparently he claimed only 2% of Americans will be getting a tax hike (income tax, that is, we're all getting his carbon tax hike).
But according to the Wall Street Journal, it's going to be some trick to pay for all of Obama's ambitious programs. Even a tax rate of 100% won't pay for Obama and the Spendocrat's plans:
A tax policy that confiscated 100% of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue. That's less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable "dime" of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.
So where's Obama going to have to to for more money? The Chinese? More likely you. Maybe Paul Krugman has the answer:
And even if fundamental health care reform brings costs under control, I at least find it hard to see how the federal government can meet its long-term obligations without some tax increases on the middle class. Whatever politicians may say now, there’s probably a value-added tax in our future. (Value-added taxes, or VAT, are very destructive to economies, especially high tech ones. And it's a tax everyone pays.) Mr. Obama thinks he can still do it with just taxes on the "rich" but it's not going to work as the WSJ points out: Mr. Obama is of course counting on an economic recovery. And he's also assuming along with the new liberal economic consensus that taxes don't matter to growth or job creation. The truth, though, is that they do. Small- and medium-sized businesses are the nation's primary employers, and lower individual tax rates have induced thousands of them to shift from filing under the corporate tax system to the individual system, often as limited liability companies or Subchapter S corporations. The Tax Foundation calculates that merely restoring the higher, Clinton-era tax rates on the top two brackets would hit 45% to 55% of small-business income, depending on how inclusively "small business" is defined. These owners will find a way to declare less taxable income. So small businesses will not grow, will not employ more people, will not expand the economy as Mr. Obama hopes. Better get ready for higher taxes no matter what tax bracket you are in.


