The President of the United States believes that our country has a revenue problem, that all of the fiscal problems that now exist are the result of government not making enough money. The solution, of course, is to raise revenue and the way to do so is easy according to the great seer Obama, by going after greedy oil companies, private jet owners and “millionaires and billionaires” who are not paying their fair share. Only then when those who pay up from their ill-gotten gains will the country be healed by way of college scholarships for whomever wants them and construction jobs for those tackling the nation’s decrepit (according to the President) infrastructure.
How much sophomoric class warfare nonsense is enough? How many people actually believe the President’s constant demagoguery and simplistic view of the world? Has the country already forgotten the stimulus from 2009? The more than $800 billion in spending that the President told us would limit unemployment and fix our crumbled infrastructure? With the rash of waivers given to political allies does anyone believe that Obamacare will actually deliver better health care for less and allow everyone to keep their current coverage if desired as promised by the President?
Politically there is no consequence to the President’s irresponsible rhetoric. The top ten percent of earners in this country pay 70% of taxes and average $114,000 in income per year. This demographic is hardly made up of millionaires and billionaires and for those that happen to earn more than the President’s arbitrary $200,000 per year ($250,000 for couples) limit defining “the rich” there simply aren’t enough of them as a voting block for the President to care. The thinking goes something like this, if you can convince 90% of the country that the 10% of top earners are their enemies you will earn the majority of the vote of the 90% therefore controlling the 70% of taxes paid by that 10%.
And what of the idea that “evil” corporations don’t pay enough in taxes? On its face this argument is inane because it’s simply an emotional ploy. Taxing certain industries may seem cathartic to the soul but what will be the real effect? Increased taxes are really an increased cost on the offering of a product and will only result in higher prices for the consumer. For necessities, such as those related to transportation, these increased costs will actually hurt those with lower incomes as they must divert savings and disposable income as a result. What about “millionaires and billionaires”? We already have what is called a “progressive” tax system where a higher rate is paid on higher levels of income. How much more should high earners pay? Not to ignore the fact that many “millionaires and billionaires” did not get there in one year but as the result of years of hard work and much of that worth is not in cash so not even subject to taxes.
One of the President’s most reliable talking points is blaming the Bush tax cuts of 2003 for the government’s so-called lack of revenue. It’s easy to understand as stated the assumption being that if incomes being the same a higher tax rate would then result in higher revenues being collected by the government. Unfortunately for the President macroeconomics isn’t that simple. There is no way to prove that income would be the same if tax rates were higher and history shows that lower rates can lead to higher revenues. There is a point where higher tax rates actually lead to lower revenue. Tax revenue as a portion of GDP actually increased following the tax cuts of 2003. The key is to find the point where revenue is maximized and history has shown that it’s not at high rates.
So what is the best path? Should the government institute all kinds of programs and then collect taxes to meet their costs? Or should the government limit what it spends to what it’s able to collect while enacting tax policies that encourage economic growth? To this President it’s simple enough to trot out the less fortunate amongst us as representative of the nation and rely on emotions to gain support for growing government. Problem is, government already spends more than it has and eventually bills come due. People should be able to keep most of what they earn and should not have to pay more as consumers when corporations are taxed higher. The President does not seem to care about reality instead chasing cheap political points. Our country deserves better.
No comments:
Post a Comment