The President's Excess Income, and Ours

The President's Excess Income, and Ours
By Mona Charen
7/12/2011

It is becoming a verbal tic -- the tendency on the part of the president to tell wealthy Americans ("people like me" he's always careful to add) that they have made more than enough money and will have to cough up more of it for the government. Speaking for himself on July 11, the president offered that he had "hundreds of thousands of dollars that I don't need."

The president is of course welcome to donate as much of his extra money as he likes to the federal treasury. He knows Timothy Geithner personally and can probably get a guarantee that his check will be cashed without delay. And since the president is so ready to impute unpleasant motives (like greed) to those who oppose tax increases, perhaps we should impute some sort of moral failing to him for not having thus far contributed his spare change to the government.

I can think of many excellent reasons to oppose higher taxes that have nothing to do with greed.

The government is a spigot. Just when you think that spending has passed some sort of gasp-inducing peak, it blows right past it. Some of us thought the half-trillion-dollar deficit at the end of the Bush administration was vertigo-inducing. In just the past two years, President Obama and the Democrats have tripled the deficit and added $3 trillion to the national debt. This added spending, 40 percent of which was borrowed, was advertised as required to create thousands of jobs, kick start an economic recovery, promote "green" energy, "save" thousands of jobs that would otherwise have disappeared and provide long-term unemployment insurance for those out of work.

The stimulus bill succeeded only in the last goal. (Slogan suggestion to the Republican 2012 presidential candidate: "If you want an unemployment check, vote for Obama. If you want a job, vote for ___.")

Arguably, raising taxes to cover this incredibly brainless and wasteful splurge encourages irresponsibility on the part of decision makers. A refusal to raise taxes will force office holders to prioritize spending.

The president may be perfectly confident that the best use of his excess cash is to pay more taxes. Those who live in the real world may consider the government hopelessly wasteful and inefficient. If the president really wants to get the most bang for his charity buck, he'd be far better advised to donate to the Boys and Girls Clubs of America or the Wounded Warriors Fund than to the IRS.

Even the spending Democrats consider their greatest achievement, Medicare, is grossly wasted. Writing in the Weekly Standard, Jeffrey Anderson recently summarized his Pacific Research Institute study on the costs of Medicare and Medicaid. It's a familiar Democratic refrain that government spending keeps increasing because it is attempting to keep pace with rising health care costs. But that may be backward. As Anderson shows, the costs of these two flagship federal health programs have grown much faster than other health care costs in America.

Since 1970, "health costs apart from Medicare and Medicaid have grown 41 percent per patient in relation to GDP, while Medicare's and Medicaid's costs have grown 89 percent and 91 percent -- nearly doubling -- as a share of GDP." Anderson mentions one reason for the disparity: "In Medicare, if providers get it right the first time, they get paid once. If it takes them four or five times -- at seniors' inconvenience and sometimes at their peril -- they get paid four or five times as much."

Further, as Merrill Matthews and Mark Litow argue in The Wall Street Journal, Medicare encourages wasteful behavior. Among similarly situated patients, Medicare utilization is 50 percent higher than private insurance coverage. "When people are insulated from the cost of a desirable product ... they use more." And then there is fraud, which according to GAO estimates, cost taxpayers more than $70 billion in 2010 alone.

Every time the president demands higher taxes, he is resisting reform that could transform our government, our economy and our fiscal predicament. Even the faculty club set from whom he takes advice must realize by now that without substantial new growth, the United States is in real trouble. The president himself agreed in 2009 that "you don't raise taxes in a recession."

We are not technically in a recession. But we are in the kind of sluggish economy that the heavy boot of government creates. Resistance to tax hikes is shorthand for "no to all that."
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To read another article by Mona Charen, click here.