No numerate person thinks that today’s entitlement state, let alone the steady expansion of it that is liberalism’s aspiration, can be funded by taxing the income of the 0.7?percent of taxpayers whose rates were just raised. Or the 2?percent whose rates would have been raised had liberals and their president simply allowed the automatic increase of rates for individuals earning more than $200,000 and couples earning more than $250,000.
Because 82 percent of American earners pay more in payroll taxes than income taxes, no politically conceivable or economically feasible middle-class tax rate can fund the entitlement state. And America’s political culture rules out funding it with new consumption or energy taxes. By rescuing almost everyone from the restoration of Clinton-era rates, liberals abandoned any pretense of paying for their program of ever- expanding entitlements. Instead, they made trillion-dollar deficits their program.
From 1950 to 2000, economic growth averaged 3.6?percent; since then, it has averaged less than 2?percent. Liberals think today’s correlation between the slow economic growth and rapid governmental growth — including under George W. Bush — is a coincidence. Conservatives do not. And they note some recent actions, done in December’s bright light of public attention and fiscal anxiety, which indicate that this government’s indiscipline is incorrigible and shameless. Consider one detail in the Taxpayer Relief Act, and an issue pertinent to the aftermath of Hurricane Sandy.