Democrats lost big in the 2014 midterm elections as President Obama’s policies energized conservative voters. Wounded but with their faith in policies that aim to redistribute wealth, Democratic in Congress put forward their new tax plan.
On the surface, the Democrats plan looks like a way to relieve middle-class Americans of some of the heavy burden of taxation. We’re all for relieving anybody of heavy tax burdens, but the plan is in essence more a plan to redistribute wealth. Not everybody gets relief from the tax burden and indeed the plan would choke the very people who create jobs and opportunities.
The core proposal is a “paycheck bonus credit” that cuts $2,000 a year off the tax bills of couples earning less than $200,000. Sounds great, doesn’t it? As Vhttp://i1202.photobucket.com/albums/bb366/IWF11/cf89def6-127c-4282-bf7a-c39f6ea54cd6_zps11cd565a.jpgan Hollen probably calculated, many of us are already clamoring for our tax cut! But the Hollen plan would merely impose a heavier burden on other taxpayers to finance this one. If he were proposing the tax cut and “paying” for it with government cuts, that would be another—and very appealing—idea.
Rep. Chris Van Hollen announced the plan at the Center for American Progress, a lefty think tank that has ties to the Obama Administration. Sold as a tax cutting plan, the Van Hollen proposals are something else entirely. A Fox News report sums it up:
However, to pay for the plan, Van Hollen wants to charge a fee on financial transactions, and curtail tax breaks for other top earners, effectively transferring wealth from Wall Street and beyond to everyone else.
Van Hollen on Monday said middle-class families need to keep more of what they earn, calling for a "fair" tax code that rewards work, and not just those who make money from making money — a dig at Wall Street.
House Republicans urged Democrats to work with them on reforming the tax code to eliminate loopholes and bring down rates overall. But they said Van Hollen's plan is not the right approach.
"Just as the sun rises in the east, Washington Democrats propose another massive tax increase," said Brendan Buck, spokesman for House Ways and Means Committee Chairman Paul Ryan, R-Wis. "Here in the House our focus is going to be on cleaning up the tax code so that we can lower rates for all taxpayers and help create good-paying jobs, not scaring them off with punitive tax hikes."
Since members of the middle class in the United States have much of their retirement income invested in the stock market, they’re going to be penalized along with Wall Street biggies. Many will be paying for their own supposed tax cut!
Some of Van Hollen’s ideas look good at first glance. Provisions would reward people who save at least $500 a year, nearly triple the tax credit for child care, and reduce marriage penalties for couples with two incomes. If you’re already salivating over your reward for saving more than $500, make a mental note that stock trades are going to cost you more money. Still, maybe these are starting points for debate with the GOP.
The $1.2 trillion price tag over a decade is not a negligible amount. The 0.1 percent fee on stock trades, by the way, is an idea borrowed from the European Union, which many countries long to escape. One way to view the Van Hollen plan is as tax hikes with messaging.
The Washington Post reports:
Although income inequality was the dominant theme in Democratic campaign speeches last year, the party has long lacked “a comprehensive [policy] strategy for dealing with this fundamental problem,” Van Hollen said.
In an election postmortem, Democratic firms SKDKnickerbocker and the Benenson Strategy Group found that the party’s message had been off target, even for much of the base. Although the economy is growing and the jobless rate has fallen, most voters still don’t feel it.
Sixty percent of moderates and 62 percent of independents said they would favor “a candidate who emphasizes growth” over one who wants to “improve the economy through economic fairness.” More than 70 percent of Republicans favored a “growth” message, and Democrats split 50-50 on the question.
Van Hollen’s proposals are the kinder, gentler face of class warfare, pitting the 99 vs. 1 percent against each other but couched in a pro-middle class rhetoric. We thought the Occupy Wall Street Movement had died down as the final shreds of their tents were bulldozed from local parks. These proposals, though clothed in the language of growth and tax cutting, will undoubtedly appeal to that crowd because of their punitive nature towards those who are capable of creating jobs.
Second, those with higher incomes are once again about to be the target of the President and progressive ire. As in the Robin Hood story, Democrats are crafting a narrative that paints all high earners as gluttons sitting on the nation’s wealth while everyone else is squeezing out a living elsewhere. Enter government-sponsored redistribution through the tax code as the solution to right this wrong.
Those on the center-Right who advocate for lower taxes and less government as a means of boosting economic wealth for all would do well to get ahead of the Robin Hood story.