The $200,000 Question

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

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NEW YORK SUN CONTRIBUTOR

The two Democratic frontrunners, Senators Clinton and Obama, this week joined the former senator of North Carolina, John Edwards, in calling for a tax increase on American households earning $200,000 a year or more. Mr. Obama said he’d do it to pay for his health care plan, while Mrs. Clinton offered a more general justification, a desire to return to what she called a “we’re all in it together’ society.”

The Democrats portray this as an effort to raise taxes on “the wealthy,” or, as Mrs. Clinton put it in her speech this week in New Hampshire, “robber barons.” It’s maybe understandable that a senator from Illinois or North Carolina would think of those making more than $200,000 a year as wealthy. But certainly Mrs. Clinton, who represents the state that includes Manhattan, where the average two-bedroom apartment rents for more than $4,000 a month, can understand that a lot of earners at that level are stretched by the time they get done paying for housing, graduate school debts, childcare and their already hefty taxes.

The Democratic Party of Mrs. Clinton and Mr. Obama already controls the Senate and the House, and nothing is stopping it from passing a law tomorrow increasing taxes. Let President Bush veto it just to make the point. But the senators apparently prefer to defer the tax increase, and the damage it would inflict on the economy, until after the presidential election. By that time, the business cycle may have shifted, and the Democrats may have a chance to worsen a recession by raising taxes in the middle of it.

What’s more, it seems to have escaped the Democratic presidential contenders’s notice that those earning more than $200,000 a year are already carrying well more than their share of the federal income tax burden. Tax Foundation data for 2004 shows Americans making $200,000 a year or more earned 25.52% of the adjusted gross income, but paid 49.98% of the federal income taxes. These are maybe 5 million taxpayers, representing maybe 5% of those who file taxes — do they really deserve to be stuck with more than half of the federal income tax burden?

Politically, such proposals have been losers for the Democrats in the past. Senator Kerry promised in his third debate with President Bush in 2004, “we start by rolling back George Bush’s unaffordable tax cut for the wealthiest people, people earning more than $200,000 a year.” President Bush mocked the idea, saying in his acceptance speech at the Republican National Convention in New York that Mr. Kerry was “running on a platform of increasing taxes — and that’s the kind of promise a politician usually keeps.”

Walter Mondale, running against President Reagan in 1984, said to the Democratic National Convention, “Mr. Reagan will raise taxes, and so will I. He won’t tell you. I just did.” Reagan responded in a debate, “I don’t believe that Mr. Mondale has a plan for balancing the budget; he has a plan for raising taxes.”

There was no President Mondale or President Kerry in part because Americans don’t believe politicians when they promise to raise taxes only on the rich. They know that once politicians get started raising taxes, no one is safe. The last genuinely popular Democratic president was Kennedy, who cut top marginal tax rates to 70% from 91%. And while President Clinton raised taxes on income, he cut them on capital gains after Republicans took over Congress.

The Democratic leaders who took back Congress in 2006 have so far avoided tax increases, which may be a tribute to their political savvy. But if Mrs. Clinton and Mr. Edwards, whose incomes both well exceed $200,000, are going to campaign on making the upper middle class shoulder even more of the burden for their extravagant biggovernment spending plans, the 2006 election may be the last one the Democrats win in a long time.

The New York Sun
NEW YORK SUN CONTRIBUTOR

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.


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