Taxes. If Congress does not act, there will be a huge tax increase next year. Congress will act, meaning that there will be a huge tax increase for some Americans–those who are already paying nearly all the taxes–but not others. But that is only the beginning. Obamacare, tax and trade, and everything else that the Obama administration wants to do in the domestic sphere costs lots of money. Harvard economist Greg Mankiw asks a good question:
[The Obama administration’s] spending programs require much higher taxes than we have now and, indeed, much higher taxes than they have had the temerity to propose. Here is the question I have been wondering about: How long can the President wait before he comes clean with the American people and explains how high taxes needs to rise to pay for his vision of government?
To a considerable degree, I don’t think Obama ever intends to “come clean;” rather, he intends to stick us and our children with the tab through a combination of unheard-of deficits and inflation. He may even think that impoverishing our children is a good thing because it advances his egalitarian agenda: poor children and your children will start out more or less even.
But the topic can’t be entirely avoided, if only because Congress will have to debate the extension of the Bush tax cuts later this year. That debate, and the inevitable result, will leave taxpayers even surlier than they are now, just in time, one hopes, for November’s election.