“Can a people tax themselves into prosperity? Can a man stand in a bucket and lift himself up by the handle?” –Winston Churchill, Speech at the Free Trade Hall, Manchester, England (1904)
Many are calling yesterday’s healthcare ruling upholding Obamacare as a “tax” the largest tax-increase in history. It may very well be that, if implemented, by the end of this decade we will look back on Obamacare and its bureaucracy and see that it certainly was the largest tax-increase in U.S. history. However, Politifact.com is reporting that, at the very least, Obamacare is the largest tax-increase in two decades.
It has been argued that Obamacare is an increase on par with 1993 tax increases under President Clinton, and that the TEFRA tax law of 1982 was actually a larger tax-increase, although TEFRA was supposed to accompany massive federal budget cuts to reduce inflation and stabilize the economy, and President Clinton’s tax hikes were performed in conjunction with cuts in other areas that ultimately balanced Congress’s budget. Other than that, some taxes of the 1960s and 1940s have been argued to be as large or larger.
The big difference that sets Obamacare apart is that nearly every major tax-hike in U.S. history was enacted to directly fund existing operations from the federal government. Government spending was at an unsustainable level, inflation was on the rise, and the tax hikes were enacted to reduce Congress’s need to borrow money and control inflation.
Today, our budget is nowhere near “balanced;” government spending is already at an unsustainable level; Obamacare institutes a massive government program over and above the current spending; and the “tax” that accompanies it is only intended to offset some of its effects. Unlike the tax hikes of Presidents FDR, LBJ, Carter, Reagan, Clinton, and Bush Sr., it makes no effort to rein in the effects of existing unsustainable spending. It simply seeks to justify additional spending.
Whether or not Obamacare actually is the largest tax-increase in U.S. history is still a matter up for debate. One thing is certain, however: It’s the largest in two decades and it stands alone among major tax-hikes in its purpose and effect.
With government spending out of control and our country’s private sector languishing, a tax-increase of this magnitude cannot likely bode well for America.