Big-spending politicians need to get their story straight when discussing the fundamental question of whether we have the money for the government programs they want to fund. President Obama claims that we would have enough, if only Republicans would acquiesce to another tax hike on the rich.
"We've been reminded that while it's critical for us to cut wasteful spending, we can't just cut our way to prosperity," Obama told reporters this week, before arguing that "the wealthiest individuals and corporations can't take advantage of loopholes and deductions that aren't available to most Americans."
Unfortunately for Obama, Sen. Ben Cardin, D-Md., got off message on Friday. Instead of joining in Obama's political fantasy math, he called for two massive tax increases that would be needed just to sustain the current level of long-term federal spending.
First, Cardin brought up a tax that would pummel millions of low-six-figure earners, and which would be especially punishing for self-employed small-business owners. "The long-term demographics of America dictate that we have a sounder financial footing for Social Security," he said at a town-hall meeting with employees at the National Institutes of Health. "I fully agree that part of the solution for Social Security long term is to have people pay on their payroll income beyond the current cap -- the current cap a little over $100,000. ... Part of the solution is to raise that cap to a more realistic level."
Cardin went further in proposing a massive tax increase on families with even lower incomes when he endorsed the idea of a carbon tax. "It, first of all, would tax pollution at its source by reducing financial incentives for carbon," he said. "You'd have positive incentives to reduce carbon. It is a more predictable revenue source than a gasoline tax, therefore it could be a substitute as we deal with energy in this country for financing our roads, our bridges, our transit systems, etc."
Just how big a tax increase is Cardin proposing? In 2008, the Congressional Research Service calculated the effect of raising the cap on FICA taxes to three different levels -- $186,000, $214,000 and $250,000 -- and found that it would raise taxes by more than half a trillion dollars, minimum. If the FICA cap were set at $250,000, it would raise $682.7 billion over 10 years.
Democrats might defend that tax increase as a long-term proposal that hits (sort of) rich people, even if its chief effect would be to punish those who live in areas with a high cost of living, such as the Washington area. But Cardin's other idea would hurt poor people immediately. The Congressional Budget Office scored one carbon tax proposal last year that would raise $1.2 trillion in revenue over a decade (that is, not even enough to cover the costs added by Obamacare). According to CBO Director Douglas Elmendorf, this entire burden would be "passed through to the cost that consumers face on energy products" and "all other products that are made using fossil fuels."
The poorest Americans would be hit hardest because their "behavior is difficult to change in the short run," the Heritage Foundation has noted. A single mom making $50,000 a year can't just run out and buy a Prius to reduce her exposure to a carbon tax.
Cardin knows that taxes must rise dramatically on the middle class if the federal government is to sustain even current levels of spending. Unlike Obama, he is at least being honest about it.