The post below is an excerpt from a special report on the looming tax hikes that take effect Jan. 1, 2011, from the October 2010 issue of Townhall Magazine. The piece, "The Liberals' Plans to Drain Your Wallet," examines why President Obama and the rest of his liberal cohorts in the Democratic Party -- and in the Party's voting base -- actually want your taxes to go up. They think it is their money -- not yours.
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Tax hikes are coming -- which is exactly what President Obama and the rest of the redistributionist, progressive Left want.
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Liberals need money -- and lots of it. You've got it, they want it, and they'll say or do almost anything to get it.

In the coming tax debates, that's the bottom line. To keep Uncle Sam from draining your wallet even more than he does already, you need to understand the overall strategy of liberals, recognize their legislative tactics and parry their myths.
Liberals want to grow government. They believe in government involved everywhere their imagination can take them. And they understand full well that growing government expands their political base as more Americans become dependent on government -- and therefore receptive to even more government.

President Obama has been notably successful at growing government. Right from the start, Congress pushed through a major expansion of Medicaid. Then came the budget-busting, economically useless Obama "stimulus" bill. Next, were ObamaCare and numerous lesser spending bills.

With all this largesse, federal spending today absorbs about 25 percent of our economy, compared to a normal level of about 20 percent. (Referring to spending as a share of the economy makes the discussion more tractable, but it's also important to look at the simple figures. In 2010, federal spending is a whopping $700 billion above the norm.)

The problem for the country is that, under Obama's policies, spending stays far above normal. It is temporarily elevated due to the recession, sure, but long after the recovery is underway, federal spending remains nearly 24 percent of the economy, producing budget deficits of nearly $1 trillion and rising, even assuming the Obama tax hikes take effect. And this is before the entitlement-spending wave really hits as projected in a few years.

Obama and friends know this is unsustainable. Republicans know this is unsustainable. More importantly, the credit markets now consuming Obama's massive outpouring of Treasury bonds know this is unsustainable. And the markets get the final word, which is sure to be "no."

The choice is relatively simple: return federal spending to historical levels of about 20 percent of our economy or raise taxes by roughly $600 billion a year by 2012 -- more than $5,000 per household. Even for today's extreme liberals, that's a tall order, but they're up to the task if we let them have their way. To sustain their spending, they need your money.

Tax hikes go into effect automatically on Jan. 1, 2011. Legislation doesn't even need to reach Obama's desk.

Why would liberals be willing to threaten a middle-class tax hike before an election? Why would they be so anxious to enact a massive tax increase knowing its effects on the economy? Despite the evidence to the contrary, they believe the economy will recover soon and strongly either way. And they need the money, and they think they need it more than taxpayers do.

Read the rest of this important report on your taxes in the October issue of Townhall Magazine.