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Taxing the rich won’t close Obama’s deficit

During his 2008 campaign, Barack Obama usually identified “the rich” as families earning income of $250,000 a year and up. He swore he’d never ever ever raise taxes one dime on anybody making less yearly income than that, and he swore he’d rein in federal spending.
After he took office in 2009, President Obama — and his fellow Democrats who controlled Congress from 2007 to 2011 — sent government spending rocketing upward so far that he’s on track to add as much debt in one term as all 43 previous presidents combined.
Since the recent release of two detailed and comprehensive Republican plans to cut spending — one by The Republican Study Committee and another by Representative Paul Ryan — President Obama has apparently been shamed into responding with something slightly less insane than his original binge-spending 2012 budget.
This is what passes for an Obama plan for closing the deficit (emphasis mine):

The fourth step in our approach is to reduce spending in the tax code, so-called tax expenditures. In December, I agreed to extend the tax cuts for the wealthiest Americans because it was the only way I could prevent a tax hike on middle-class Americans. But we cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society. We can’t afford it. And I refuse to renew them again.
Beyond that, the tax code is also loaded up with spending on things like itemized deductions. And while I agree with the goals of many of these deductions, from homeownership to charitable giving, we can’t ignore the fact that they provide millionaires an average tax break of $75,000 but do nothing for the typical middle-class family that doesn’t itemize. So my budget calls for limiting itemized deductions for the wealthiest 2 percent of Americans — a reform that would reduce the deficit by $320 billion over 10 years.
But to reduce the deficit, I believe we should go further. And that’s why I’m calling on Congress to reform our individual tax code so that it is fair and simple — so that the amount of taxes you pay isn’t determined by what kind of accountant you can afford.

Tax the rich, tax the rich, tax the rich. All of our problems will be solved if we only tax the rich. Right?
Wrong. As shown by the Wall Street Journal, the “rich” haven’t got enough money:

Under the Obama tax plan, the Bush rates would be repealed for the top brackets. Yet the “cost” of extending all the Bush rates in 2011 over 10 years was about $3.7 trillion. Some $3 trillion of that was for everything but the top brackets — and Mr. Obama says he wants to extend those rates forever. According to Internal Revenue Service data, the entire taxable income of everyone earning over $100,000 in 2008 was about $1.582 trillion. Even if all these Americans — most of whom are far from wealthy — were taxed at 100%, it wouldn’t cover Mr. Obama’s deficit for this year.

For the sake of argument, let’s go with President Obama’s “plan” and seize every last bit of money from any family making $100,000 a year or more. What next?
It’s. Not. Enough.
Barack Obama is offering you a false choice: A) do nothing and watch Medicare, Medicaid, and Social Security collapse our entire economy into hyperinflation, government default and another Great Depression; or B) make no changes in Medicare, Medicaid, and Social Security, and pay for it all by massively raising taxes on the middle class (after redefining them as “the rich”). According to him, there are no other options.
He’s lying.
Wouldn’t you rather avoid raising middle class taxes, put reasonable restraints on spending for Medicare, Medicaid, and Social Security, and preserve those programs for those who truly need them?

RSC budget plan       Ryan budget plan

It’s too late to fix our enormous deficit without pain. We can either feel some pain now and fix the problem, or we can keep living in Obama’s fantasy land until we experience incredible pain a little bit later.
Which do you prefer?

Lisa Benson toon 4/14/11

5/25 Update: