Democrats not done raising your taxes?
White House plotting next revenue grab
- Duration 6:11
- Date Jan 12, 2013
White House plotting next revenue grab
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Joining the panel this week Wall Street Journal columnist and deputy editor Dan hitting her editorial board member Mary Anastasia O'Grady and Washington columnist.
Kim -- -- Kim before we get to the next tax increase I want to.
Inform our viewers about this a stealth tax that was included in the big tax increase.
-- eliminating some deductions and exemptions for taxpayers above 250.
Thousand dollars not 400000 dollars -- that advertising the political spin on this deal suggested how did that happen.
Well this was stuffed in the -- it was -- revenue grab a bite Democrats with a little taste Pall of what they would like to do in terms of further closing deductions and loopholes for the wealthy but that.
The technical term for these are -- MPs and what they are basically it's a phase out.
Of the ability of deductions for those who are higher income taxpayers and as you said.
Came at a much lower threshold.
Then those marginal income tax rate hikes that were the subject.
Thrown in there dead of night it was something Democrats demanded.
And -- it managed added to the amount that they can claim and -- You have at a 150 billion of that -- 620.
Billion tax increase are gonna calm.
From these provision so they're very very significant and a lot of taxpayers will get this big surprise.
Come come next April.
So Mary here here -- -- the question.
We have this big tax increase significant the president won let's face it he he he really got what he wanted.
So why do we need more revenue I thought this was going to solve the deficit -- I'll if you look at 2011.
IRS statistics about 2% of US households.
Dollars a year or more if you took all up there in com.
You would run the government for less than half a year pay there's just not on every dollar they -- exactly and there's just not enough money.
In the rich.
To pay the bills that we have and so you know I think Howard Dean has admitted this many people who are Democrats who are outside of elected office have admitted this.
And we all know that you know eventually they're gonna go after the middle class -- is -- says one of the ways they've -- it decided to do this.
Is going using the limiting deductions and in fact that should have that.
People -- at couples who earn a 130000.
Dollars each individually.
Fall into this category where they start to lose deductions -- exactly rich people particularly if you live in New York.
Because of their joint filers -- over the 250000.
Dollars threshold and that's -- -- begins to phase out -- Paul the Democrats believe.
This generation Democrats believe that over the last forty or fifty years the United States has made all these social commitments to the population Social Security Medicare Medicaid.
Now obamacare -- we have and we -- out.
And they think that the conventional wisdom the Simpson Bowles -- Argument is that we can't afford us that out -- -- -- years from now all of our taxes will be going to pay for these things.
The Obama Democrats believe we make these commitments and we have to find a way to pay for them they do not want to cut this spending.
And so on US spending which has been about 20% of GDP since 1969.
They are trying to get it up to around 2425%.
Of GDP we keep repeating this number.
But in the fifteen trillion dollar economy every percent of GDP is a tremendous amount of spending.
But tax revenue the last three years has been dollar around 16% of GDP.
That's a tremendous gap but -- out of raise taxes to close that -- part of that reduction in the sixth -- normally it's about 1818 and a half minutes popped up -- -- under Bill Clinton presidency about 20% when you have a real economic -- if you have 60% is because the growth and so is so well that's what it -- what their policies are going to guarantee in my opinion.
2% growth for a long period of time they will never get tax revenue back upwards of 1% Kim let's talk about another tax that's on the -- Dick Durbin the number two Democrat in the senate this week said raised that the prospect.
Of an energy tax in addition of this and mrs.
Reflects part of the -- the point that Mary made which is you can go after the rich under the current tactic you can't begin to finance the government we have.
So ultimately got to find new ways to get the revenue is is this energy tax actually going to be -- prospect in the next couple of years.
All they're gonna try and I think we all over it Dick Durbin a bit of thanks for being so honest about what they wanna do.
I believe as as Mary said you couldn't even go after everybody it's -- can't it is even have to go after the middle class the problem for Democrats is that they have now about that they're not going to raise income taxes on the middle class so instead what you have to do is go after a product that everybody uses that is essential that everyone's like you do it.
With energy tax electricity tax -- -- tax oil for your heating in your home.
This would be a huge hit to the economy but they are gonna try to do -- -- -- triangular under the guise for instance about carbon tax.
So they can look as though they're being environmental in this process as well too but this is going to be the quickest and easiest for them they think way to try to slip a broader tax on the middle class into the discussion -- How should Republicans responds well this is what happens when you politicians who never think about growth and Stan was saying I mean I think the way they should respond to it is.
A larger economy means more revenue for the government.
And more jobs for people and more prosperity and a happier society what about for keeping the -- what about trading and energy tax for lower income taxes -- I think that's probably a they'll do something like that a carbon tax I would think maybe in return for lowering payroll taxes saying the doubt Larry will propose this I think the Democrats would propose -- -- carbon taxes -- recently unpopular politically.
Remember Bill Clinton's 1993 BTU tax around Democrats said it lost the house in 1994 because of that -- -- when we come back presidential.