What’s the Endgame?

It’s not going to be enough. It’s not going to be nearly enough. He’s going to have to fairness a lot of people.

From today’s Review and Outlook column in the WSJ, discussing Hope ‘n Change’s revenue expectations:

Note that federal income taxes are already “progressive” with a 35% top marginal rate, and that Mr. Obama is (so far) proposing to raise it only to 39.6%, plus another two percentage points in hidden deduction phase-outs. He’d also raise capital gains and dividend rates, but those both yield far less revenue than the income tax. These combined increases won’t come close to raising the hundreds of billions of dollars in revenue that Mr. Obama is going to need.

But let’s not stop at a 42% top rate; as a thought experiment, let’s go all the way. A tax policy that confiscated 100% of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue. That’s less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable “dime” of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.

But what’s the endgame here? Hope ‘n Change can’t possibly believe that any of this will work. Or does he? At what point do all taxpayers simply refuse to work? While I’ve never been a big Ayn Rand devotee, her essential Atlas Shrugged point is well taken: at a certain point, productive people will not allow themselves to be looted. They will either withdraw from the economy or simply stop working.

Think about it: if we do work, we have to pay taxes on penalty of imprisonment, fine and forfeiture.  And if we don’t work, the government’s revenue stream dries up. 

But there’s no law that says we have to work.

And they can’t make us.

Tagged as: endgame, Obama, strike, taxes