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Mandates, Taxes, Spending Cuts and Crazy Talk

by George Landrith

After a long, tough campaign, Barack Obama won reelection by a slim 51% to 49%. Now Obama is claiming a broad mandate to increasing taxes and demands that Congress yield to his view that there must be a higher tax burden for the wealthiest Americans.

Obama is correct that he made tax increases an issue during his reelection campaign. But so did the Congressmen who comprise the majority in the U.S. House of Representatives. GOP Congressmen won reelection opposing tax rate increases on any Americans.

Many of those Congressmen won by more than Obama’s slim 2% margin of victory. Each winning Republican candidate for the U.S. House of Representatives can say to President Obama, “Sir, with all due respect, we campaigned on not raising taxes and each of us won on election day.” Many of them can tell the president that they won by a far more substantial margin than he did. So maybe they are the ones with a mandate.

Here is an interesting quote: “Maybe peace would have broken out with a different kind of White House, one less committed to waging a perpetual campaign — a White House that would see a 51-48 victory as a call to humility and compromise rather than an irrefutable mandate.”

This might sound like something a disappointed Republican said about Obama’s reelection, but it is not. It is what Barack Obama said in his book Audacity of Hope about George W. Bush’s reelection. So in 2004, Obama said a 3 point win in the popular vote wasn’t a mandate and criticized the president for suggesting otherwise. But in 2012, just 8 years later, Obama asserts that his even slimmer margin of victory gives him a mandate.

Here’s the truth — Obama won reelection in a tight and hard-fought political campaign. As a result, he gets four more years. But he doesn’t have a mandate. He didn’t even ask for one. His primary campaign theme was “give me some more time.” Voters did. But by relatively small margins. In fact, Obama is the first president to win reelection with a smaller share of the vote in his second try than he won in his first try since Andrew Jackson — who was first elected in 1828 — that is 184 years ago. So Obama’s reelection was historically unimpressive.

Nonetheless, let’s examine Obama’s campaign claim the wealthiest among us must be asked to pay their fair share. The problem is that statement implies that the wealthy are not paying their fair share. But he never provided even a shred of credible evidence that the wealthy are not paying their share of income taxes.

The nonpartisan Congressional Budget Office’s most recent study on tax burdens reveals the bottom 20% of American earners paid less than 1/2 of one percent of federal income taxes paid. That is a rounding error to zero. Conversely, the ten percent of households with the highest incomes paid more 70% of all federal income taxes. Perhaps this is why Obama never got into the specifics — it is hard to argue that the top 10 percent paying 70 percent of the income taxes isn’t at the very least their fair share.

Let’s ask the real question — why is there a budget crisis? Is it because Americans don’t pay enough taxes? Or is it because the federal government spends too much money? If the problem is that Americans don’t pay enough taxes, then perhaps we should raise taxes. But if the problem is that the President, the House and the Senate spend too much, then we should fix the spending problem, not pretend that the problem is that Americans pay too little in taxes.

Federal spending has grown steadily and rapidly in recent years. Federal spending now equals about 25% of the nations gross domestic product — that is the highest since any time since World War II. That means that the federal government is spending one out of four dollars. Due to the weak economy, federal tax receipts are down somewhat from previous highs. But the truth is if the President and Congress were spending at 2007 or 2008 levels our federal budget deficit would be less than one-half their current levels. The simple truth is — federal spending is driving the budget crisis. The weak economy also contributes to the problem. But it is not a problem because Americans are taxed too little.

I have counseled people with financial difficulties. Few had the audacity to argue that if their employer would simply pay them more, they wouldn’t be in debt. They all understood that they had to reduce their expenditures and bring them in line with their income. Only President Obama, Harry Reid and Nancy Pelosi would argue that they should continue to spend and demand more income. They have not passed a budget in more than three years. Herein lies the problem.

For those who say that Obama, Reid and Pelosi are willing to do a “balanced approach” and cut spending in addition to raising taxes, history is instructive. On numerous occasions in the past, Congress has proposed similar balanced approaches. The tax increases always go into effect immediately with the promised spending cuts pushed into the future. The only problem is that the spending cuts never materialize. They are always a diversion.

That is why conservatives can say that they won’t agree to raise taxes by $1 in exchange for $10 worth of spending cuts. They remember the past deals promising similar “small tax increases” for “large spending cuts.” The balanced approach has proven over the years to be nothing but a lie. There is nothing about President Obama’s first four years or his campaign or anything he has said since the election that gives conservatives any objective reason to believe that his calls for a “balanced approach” are any different than the diversions of the past. The burden is on Obama to prove that he is serious about cutting spending.

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George Landrith is the president of Frontiers of Freedom, a public policy think tank devoted to promoting a strong national defense, free markets, individual liberty, and constitutionally limited government. Mr. Landrith is a graduate of the University of Virginia School of Law, where he was Business Editor of the Virginia Journal of Law and Politics. In 1994 and 1996, Mr. Landrith was a candidate for the U.S. House of Representatives from Virginia’s Fifth Congressional District. You can follow George on Twitter @GLandrith.