Congressional aides call it “Taxmaggedon.” Federal Reserve Chairman Ben Bernanke calls it “a massive fiscal cliff.” “It” is Jan. 1, the day taxes increase because the George W. Bush-era tax cuts expire and Obamacare taxes kick in.
According to The New York Times, it will mean a typical middle-class household making $50,000 will see a tax increase of about $1,750. If not addressed, according to The Times, inflation-adjusted, after-tax income will fall to 1998 levels.
Some people, including President Barack Obama, are playing the class warfare angle, demonizing the rich as a means gaining support for higher taxes. Democrat National Committee Chairwoman Debbie Wasserman Schultz recently said the Bush tax cuts will not be continued. But none of the elites in halls of power are talking about making any significant cuts in the growing government Leviathan.
In Rights of Man, Thomas Paine warned that, “Invention is continually exercised, to furnish new pretenses for revenues and taxation. It watches prosperity as its prey and permits none to escape without tribute.”
Tax increases, even if placed only on the so-called rich, will eventually work their way down to everyone in one form or another. It’s just the way the economy works.