Democrats in Congress are itching for a fight over taxes before the November elections. Since the tax cuts passed by a Republican Congress and signed by then President George W. Bush in 2001 and 2003 – the so-called “Bush tax cuts” expire at the end of this year, everyone who pays income taxes in the U.S. is in for a tax increase next year unless Congress acts to extend all or some of the current tax rates beyond 2010.

President Obama and the Democrat leaders in the House and Senate want to extend some, but not all of the rates. They want the top two rates – now 33 and 35 percent – to revert back to 36 and 39.6 percent – the same as they were after President Clinton and his Congress raised taxes in 1993.  They say that will (1) help reduce the deficit, (2) continue to stimulate the economy and (3) be fair because the rich can afford a tax increase while low and middle income earners cannot.

The Wall Street Journal reports Democrats will try to pass the extension in September, and they believe they will score a political victory no matter how the vote turns out. Either they can take credit for giving almost every taxpayer a tax cut, or they can blame Republicans for preventing them from doing so in order to preserve tax cuts for the rich.

Whether or not the move is a smart political gamble for the Democrats depends on whether voter rely on facts or envy, but their arguments for the move are feeble at each of the three points.

DEFICIT REDUCTION – According to the Tax Policy Center, a Washington think tank connected to the Urban Institute and the Brookings Institution, extending all of the Bush tax cuts would “cost” the government an addition $2.9 trillion over the next 10 years, but the Obama plan would still cost $2.5 trillion – a difference of only $400 billion. At the rate the government is piling up the debt – it’s expected to add another $1.4 trillion in debt this year alone – a 10-year “savings” of $400 billion is hardly serious deficit reduction.

FAIRNESS – According to the Internal Revenue Service, the top 1% of taxpayers pay 40% of all federal income taxes, while they earn about 22% of all of the income. Their share of income taxes is much higher than their share of the income earned in the U.S.

The bottom 50% earn about 12% of the income, but pay less than 3% of all federal income taxes.

Taxpayers who are above the bottom half of earners, but below the top 25% - the quintessential middle class – neither poor nor rich – earn 19 percent of all income, and pay just over 10 % of all income taxes.

The top 10 percent pay well over 70 percent of all taxes collected under the federal income tax code. No matter how you slice it, the rich pay a wildly disproportionate share of the taxes.

Treasury Secretary Timothy Geitner says it’s fair to allow the top two brackets to rise back to the Clinton levels, while preserving the tax cuts for everyone else because “they can afford it.” Sure, they can afford it, but so can a lot of other people whose taxes won’t rise – like the single person making $170,000 a year or the married couple making $209,000.  But, they are in that big 28% marginal bracket, which encompasses a lot of voters. It’s too risky to mess with that bracket just before an election.

The Democrat tax calculator is capable only of political arithmetic. It is unable to calculate effects on deficits or the economy.

ECONOMIC STIMULUS – Unfortunately for the Democrats, their tax plan even contradicts their favorite “stimulus” argument – that more consumer spending will stimulate the economy. One Democrat congressman who favors extending the Bush tax cuts across the board – Rep. Gerry Connolly (D-VA) and Moody’s economist Mark Zandi (the Obama administration’s favorite economist) both said this week that the top 5% of earners generate 30% of consumer spending.

Free market economists believe economies grow primary because entrepreneurs put capital to work, turning resources and labor into products and services with market values higher than the capital which funded the production. With than in mind, it’s important to note that the Joint Committee on Taxation says half of the expected $1 trillion in business income in 2011 will be reported on individual returns subject to the top two tax rates – the very rates the Democrats propose to increase. That will mean that businesses will have less capital with which to create jobs and expand the economy.

But, even if you accept the Democrats’ stated belief that consumer spending drives the economy, it seems odd that they would want to take spending money out of the pockets of people who generate such a disproportionately large share of consumer spending.

Arguing with Democrats over tax and spend policy is a lot like playing “Whack-a-mole.” When you obliterate one of their arguments, they just move on to another, and when they run out, they just start over again, hoping voters have already forgotten the crushing rebuttal to their first argument by the time they get back to it.

They are very bad at justifying what they want to do, because it’s not justifiable, but they still often manage to get what they want, because they craft simple, easy to understand talking points that exploit human envy.

Just because their case for tax cuts for everyone but the rich is weak on every front doesn’t mean that it won’t win the day. Envy has often been a powerful weapon for Democrats in their numerous wealth redistribution schemes, and it may very well win this time too.

When voters succumb to the deadly sin of envy, it’s not just their personal character that suffers, but the character and health of the country as well. Democrats are counting on envy winning the day in the impending tax battle in Congress and the fall elections. Let your conscience be your guide.