No danger of that. If (in Milton Himmelfarb’s famous formulation) Jews earn like Episcopalians but vote like Puerto Ricans, Americans are taxed like Puerto Ricans but vote like Scandinavians. We already have a more severely redistributive taxation system than Europe, in which the wealthiest 20 percent of Americans pay 70 percent of income tax while the poorest 20 percent shoulder just three-fifths of 1 percent. By comparison, the Norwegian tax burden is relatively equitably distributed. Yet Obama now wishes “the rich” to pay their “fair share” – presumably 80 percent or 90 percent. After all, as Warren Buffett pointed out in The New York Times this week, the Forbes 400 richest Americans have a combined wealth of $1.7 trillion. That sounds like a lot, and once upon a time it was. But today, if you confiscated every penny the Forbes 400 have, it would be enough to cover just over one year’s federal deficit. And after that you’re back to square one. It’s not that “the rich” aren’t paying their “fair share,” it’s that America isn’t. A majority of the electorate has voted itself a size of government it’s not willing to pay for.
A couple of years back, Andrew Biggs of the American Enterprise Institute calculated that, if Washington were to increase every single tax by 30 percent, it would be enough to balance the books – in 25 years. If you were to raise taxes by 50 percent, it would be enough to fund our entitlement liabilities – just our current ones, not our future liabilities, which would require further increases. This is the scale of course correction needed.
When the adjustment comes, it will be catastrophic. Nothing short of that.