Taxing Us into Submission

So now we know how the “Progressives” want to pay for their fantasy slate of big-government programs: they are going to tax the hell out of the middle class.

This was pretty obvious to anyone on the right who has been observing their claims and tallying up the trillions in extra spending the left has proposed. But the “Progressive” are now tacitly admitting it, by means of an intramural battle over how the new House majority will change rules on tax legislation.

Here’s the background. House Republicans had set up a rule requiring a three-fifths supermajority for any tax increase. This is not a constitutional or even a statutory requirement, merely a procedural requirement the House imposes on itself, so the new majority is free to change it. Incoming Speaker Nancy Pelosi is proposing to change the rule to require only a simple majority for tax increases on the top 20% of income-earners, which implies that Democrats will attempt to raise taxes on “the rich.” Or, to be more exact, they will raise taxes on the wealthy and the upper middle class.

But Pelosi would keep the supermajority requirement in place for the lower 80% of income-earners, as a signal that Democrats won’t try to raise taxes on middle- and lower-middle-class earners. This is precisely what the “Progressive” wing of the party objects to. In New York magazine, for example, Eric Levitz complains, “For First Act in Power, Democrats Consider Making Their Own Agenda Impossible to Pass.” A combination of the super-majority rule and a “pay as you go rule,” which requires all new spending to be offset by new taxes, “would render a whole host of Democratic policies nonviable.” This is as frank an admission as you will get that the “Progressive” agenda can only be paid for by the non-progressive means of significant tax increases on the middle class.

It’s not that frank of an admission, though, because it’s buried under a giant piece of obfuscation: that raising taxes on the middle class would really save them money because they would get so many fabulous government services for free.

[W]hile progressives are committed to increasing the discretionary income of the bottom 80 percent, that does not necessarily mean keeping their tax rates frozen at historically low levels. Currently, for much of the American middle class, health-insurance premiums function as a steadily rising tax. A bill that required those households to pay a new, smaller monthly sum to the government—so as to fund a single-payer system that would actually reduce their cost of living by delivering radically cheaper health-care services—could hardly be called regressive. And the same can be said for legislation establishing universal child care, paid family leave, or any other program aimed at easing the middle class’s financial burdens by dramatically expanding the public sector’s ambitions.

OK, show of hands: who actually believes this? Who actually believes that the average person will save money by paying taxes for a lean, mean, efficient government-run version of something currently done by the bloated, bureaucratic private sector? Who thinks this isn’t exactly backwards from the way things work in real life?

Yet this is the fantasy these people are trying to talk themselves into. That’s the key to being a “Progressive” these days. You have to embrace Big Government as if it were a shiny new idea that had never been tried before, as if the 20th Century never happened.

This is why the most appropriate representative of the “Progressive” wing of the Democratic Party is Alexandria Ocasio-Cortez. She is only a newly elected congresswoman, she has yet to take office, and most of all, she is very young and excruciatingly naïve and ignorant. She is certainly no threat to the leadership of the Democratic old guard—yet. But she has emerged as a hero and standard-bearer for the “Progressives” because she fully embodies their dogmatic determination to keep on believing in the socialist dream and to wave aside all doubts.

Ocasio-Cortez is already somewhat notorious for proposing $40 trillion in new programs over the next ten years—$4 trillion a year, or roughly double the existing federal budget—while filibustering and dodging the question whenever she is asked where the money is going to come from to pay for all of this. More recently, she was caught claiming that $21 trillion of that money could be scrounged up by fixing Pentagon accounting errors. The claim was so absurd it was rated “false” by numerous mainstream fact-checkers, including one that quotes a Pentagon spokesman who points out that the Department of Defense “hasn’t received $21 trillion in (nominal) appropriated funding across the entirety of American history.”

Of course, now we know where that money is really going to come from: it’s going to come from taxes on the middle class, on the people below the 80% threshold. That brings us to the next bit of absurdity. Ocasio-Cortez and other “Progressives” claim that federal spending on “Medicare for All”—their new euphemism for “single payer,” which is a euphemism for socialized medicine—would be less expensive than what people are currently paying in private health care costs.

“Medicare for All” is projected to increase government spending by $32 trillion over ten years, an average of $3.2 trillion per year. In 2017, non-Medicare/Medicaid health-care spending was about $2.2 trillion. Spending $3.2 trillion to replace $2.2 trillion is not a savings. Moreover, the $32 trillion price tag for Medicare for All is acknowledged, by the author of that estimate, to be an unrealistic lowball figure based on optimistic assumptions in the proposed legislation, such as the idea that the whole system can function by paying Medicare reimbursement rates that are far lower than private reimbursement rates. Yet those low Medicare rates depend, in part, on shifting costs to non-Medicare payers. So what will happen when there are no non-Medicare payers to take the hit? Then there is the Paradox of Subsidies: it is not a coincidence that the two things government has worked hardest to make “affordable” over the decades—health care and education—are those whose cost has grown at the highest rates.

We have had this experience again and again with government programs that are proposed under lowball estimates of their cost, but which end up delivering far fewer benefits for far more money than promised. In fact, the “Progressives” implicitly recognize this because they are pushing for “Medicare for All” by campaigning against Obamacare. They seem to think that our memories can’t reach as far back as six years ago (when Obamacare was implemented) or ten years ago (when it was passed) and recall that this was the previous “Progressive” program that was going to fix health care and save the middle class money.

It’s the old Wesley Mouch gambit: go from failure to failure, and each time assert the same answer—”I need wider powers.”

Medicare for All financed by big tax increases on the middle class is not likely to happen soon. There are enough swing-district Democrats left in the party—more of them, in fact, after this last election—to force Nancy Pelosi to disavow tax increases on the middle class. In any case, Republicans still hold the Senate and are likely to block any big spending measure that doesn’t originate with them.

But this issue is still important, because the “Progressive” wing of the left is rising in power and becoming dominant. It is not so influential among elected officials, yet—Ocasio-Cortez, who ran unopposed, was one of the few outright “Progressive” victories this November—but it is certainly becoming dominant in the media and in the left-leaning intelligentsia, such as it is. This sets the Democratic Party up for a profound conflict. As Levitz warns:

When voters went to the polls earlier this month, 123 House Democrats, and many of the party’s House candidates, had pledged to support Medicare for All. If the new Democratic majority decides to make that goal more difficult to achieve—as its first act upon taking office—then it will recklessly betray many of the people whose votes, dollars, phone calls, and door-knocking put them into power.

Massive new programs that require massive new taxes on the middle class are an agenda items that has become central to the Democrats’ political identity, and that tells us a lot about the dominant political and philosophical impulse on the left.

What “Progressives” are asking the middle class to do is to embrace huge tax increases in exchange for benefits that will supposedly reduce their overall expenses—but which will probably cost much more. The refusal of the “Progressives” to even consider this possibility (this certainty, given past experience) tells us a lot about their real priorities. The idea that government-run programs would be more efficient and less expensive than private spending are so implausible that the only thing that can explain them is a dogmatic bias in favor of government action and against private action.

When it comes to every important good or service, the left would rather have us rely on a government program, whatever the cost in taxes, than to be able to provide for ourselves with our own money. Taxes and government spending are not the means to an end. They are the end. Making us all dependent on government is the goal that overrides all other goals.

This is precisely the pathological altruism I’ve been writing about. These so-called “humanitarians” claim to want to help the average person, but only on the terms they dictate. They can’t really be bothered to make sure that anyone will benefit, that their optimistic projections are realistic, or that they have the slightest clue where the money is going to come from, because that doesn’t really matter—so long as they get to parade around as great benefactors of humanity.

So the middle class should consider itself warned. The Democratic Party’s rising “Progressives” want to tax you into submission, and they will expect you to thank them for their generosity.

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