Obama Considers Middle Class Tax Hikes for Healthcare, "Cap and Trade"

June 29, 2009 05:09 PM ET | Peter Roff | Permanent Link | Print

By Peter Roff, Thomas Jefferson Street blog

As his opponents predicted during the 2008 election, President Barack Obama's plans for America will be paid for by higher taxes on the American middle class.

Candidate Obama promised those in the middle class that they wouldn't see an increase in the taxes they pay to the federal government. "I pledge to you that under my plan, no one making less than $250,000 a year will see any form of tax increase. Not income tax, not capital gains taxes, not any kind of tax," the Manchester, N.H., Union Leader reported him saying in September 2008. Well, as Mona Lisa Vito said in My Cousin Vinny , "that plan's moot."

In point of fact, Obama has already broken that pledge. His increase in the federal excise tax on cigarettes took care of that. But it isn't stopping there. If anything, the White House, having already inhaled, now appears somewhat feverish on the subject of higher taxes.

The cap and trade legislation he backed that passed the U.S. House Friday will hit the wallets of most every American hard with what many folks would call higher taxes on energy. And now from inside the West Wing comes the word that Obama's much vaunted, much criticized public option healthcare reform will be paid for, at least in part, by higher taxes on the middle class.

White House senior adviser David Axelrod said the president won't rule out a health reform bill that includes a middle-class tax hike.

"The president had said in the past that he doesn't believe taxing healthcare benefits at any level is necessarily the best way to go here. He still believes that," Axelrod told George Stephanopoulos on ABC's This Week. "But there are a number of formulations and we'll wait and see. The important thing at this point is to keep the process moving, to keep people at the table, to the keep the discussions going. We've gotten a long way down the road and we want to finish that journey." By refusing to rule out higher taxes on the middle class as a way to pay for "punishing healthcare costs," Axelrod telegraphed that idea is very much a live option.

Having tested the waters and finding them warm and inviting, it looks like the administration is about to jump into tax revenue pool with both feet. What remains to be seen is if the voters will make them take a bath for it in November 2010.