By Larry KudlowIn the hours following the Supreme Court's decision to ratify Obamacare, Romney got $4.6 million in donations from 47,000 individuals. The tide is with him. The Supreme's are a game changer.
But Romney has to make the case. He needs to link the anemic jobs and economic situation to the Obamacare tax, spend, and regulate fiscal drag. And he has to add to that mix the dangers to our freedoms embodied in Justice John Roberts's expansion of the power to tax our personal behavior.
One way of looking at Roberts's slight-of-hand decision to vote in favor of Obamacare is that a tax is a tax is a tax. As a non-lawyer, I see the Roberts vote as a massive expansion of federal government taxing power. Just what we don't need.
Supply-siders like myself argue that when you tax something you get less of it. With Judge Roberts throwing in with the liberals on the Court to expand federal tax powers, we now face the massive threat of ultra-slow economic growth in the U.S. for years to come.
The Roberts Court has served up a "tax mandate" that is more powerful than the still-limited Commerce Clause regulatory mandate. Roberts has created a huge new loophole. Instead of new purchase mandates, we'll have new purchase tax mandates.
This expanded tax power could force me to eat broccoli if the government so chooses, or make me put solar panels on my home. Governor Bobby Jindal now worries about the people who "refuse to eat tofu or refuse to drive a Chevy Volt." Not because of the Commerce Clause, but because of the new tax-mandate clause. You'll be taxed heavily if you don't do what the government wants you to do.
And don't we have enough taxes already in this country? And what about the tax threats that are coming down the road?
Repealing the Bush tax cuts and adding on the Obamacare tax hikes will produce outrageous marginal tax rates of roughly 45 percent for successful earners, dividend investors, and small-business owners. In other words, European-style taxes, which suggests anemic European-style growth.
Americans for Tax Reform estimates that Obamacare contains 20 new or higher taxes on American families and small businesses. Investor's Business Daily says this comes to a $675 billion tax hike over the next decade. Steve Moore of the Wall Street Journal editorial board cites CBO estimates that roughly 8 million (or 76 percent of) middle-class taxpayers earning less than $120,000 a year will shoulder the new Obamacare tax mandate authorized by Judge Roberts.
And this whole panoply of Obamacare taxes is already one big drag on the economy. Just in recent days, revised GDP came in at 1.9 percent, and real consumer spending was essentially flat. Job growth has slowed markedly, as have new factory orders. Economists on Wall Street are looking for only 2 percent growth this year. The Fed is so worried about the economy it might launch another counterproductive quantitative easing.
Meanwhile, health-care premiums are going up, not down. Mandated one-size-fits-all health services and insurance will incentivize businesses to pay the fine and push employees into the state's exchange system. And this will drive up the subsidized entitlement even more.
The CBO now estimates that Obamacare spending will hit $1.8 trillion over the next ten years. That's a number that started out at only half as much. But that's what happens when you install European- style entitlements. You threaten to bankrupt the nation's finances. Or you threaten to literally tax us into perpetual subpar growth and high unemployment.
And that's the case Mitt Romney has to make. But he has to hammer away, day by day. He needs to make these points if we're to end the malaise.