Posted on 07/25/2011 12:59:54 PM PDT by jfd1776
Barack Hussein Obama and his administration have called for the rich to contribute their fair share, in this and every crisis.
Whether we speak of the debt ceiling or the annual deficit, the problem of rising unemployment or that of sinking consumer confidence, the Administration’s mantra is the same: "The rich" must kick in their fair share.
How they define the rich is another matter. In one conversation, it’s those with incomes above $250,000/year, or perhaps $200,000, or perhaps $150,000. In another context, it’s those who own jets, or who have access to corporate jets, or perhaps who have heard of corporate jets… the definitions change like the wind, more to meet the needs of the argument of the day than to establish any clear meaning for a useful debate.
To keep it simple, perhaps we should define the rich the way the Left really means it: it's everybody who makes a little more money than we do. That way, it’s a moving target: it might be the guy across the street today… but if we get a raise to match his salary tomorrow, then “the rich” magically becomes someone who makes at least a little bit more than that.
Just so long as our neighbor earns more than we do. “The rich” is always “him,” never “us.”
What Can The Rich Do To Chip In?
This is the great question, isn’t it? “The rich” is such a broad group, ranging from millionaires and billionaires, down to our next door neighbor the dry cleaner, the accountant, or the corporate middle manager who earns so much more than we do (or our jealous souls think he does, anyway). So let’s see what that group can do for the economy, to help chip in, as the president says.
When the rich own or run businesses, they can hire more employees to help improve the unemployment statistics… …if the government doesn’t take that potential salary money away from them through increased taxes.
When the rich own or run businesses, they can buy more things – office supplies, raw materials for manufacturing their finished goods, etc. – helping their vendors employ others, making taxable profits and taxable sales for those vendors… …if the government doesn’t take that purchasing money away from them through increased taxes.
Whether the rich own or run businesses themselves or not, they can spend their money on buying things at retail – clothing, books, furniture, knick-knacks for the house – employing the clerks at the struggling stores, staving off increased vacancy rates at the malls for another month, or week, or day… …if the government doesn’t take that purchasing money away from them through increased taxes.
The rich can spend their money on entertainment – whether on local restaurants, comedy clubs, and live theater, or on those far away, by adding vacations in New York, Chicago, the Dells, Branson, Miami, or the dozens of other famous tourism magnets across the country. …if, that is, the government doesn’t take that money away from them through increased taxes, which, as always, hurts not only the directly taxed individuals, but also all the people, groups, businesses, and communities that depend on that entertainment spending for their very livelihoods.
If the rich are business owners, they can hire contractors to renovate or otherwise improve their offices or factories – and whether they’re business owners or not, they can do the same to their homes, adding additions, or decks, or finishing basements or attics, or remodeling the bathroom – all of which employs not only the construction or remodeling firms doing the work, it also employs the people who work for their materials vendors, the manufacturers of paint, cabinetry, flooring, drywall, sinks and faucets, and so many other housing-sector industries… …if, that is, the government doesn’t take that money away from them by raising their taxes.
The rich might also be inclined to donate some money to charity. By every study, the American people are the most generous on earth with their personal funds. They might donate to a veterans’ hospital, a food pantry, a church or school, a research laboratory for cancer or AIDS or MS, a battered women’s shelter or group home for the mentally ill. Not only do they have the personal inclination to do so, as generous Americans, but the tax code encourages such donations through the tax-deductibility of charitable contributions. …Unless, of course, the government takes that money away from them by raising their taxes, or makes the donations cost them more rather than less, by removing or reducing the tax deductibility that has long contributed to American charitable generosity.
The rich might be inclined to just save that money for an uncertain future, putting it in the bank, which helps the banks loan money to investors, to people refinancing their homes, to businesses embarking on expansions. Our economy depends on the rich and their savings, more now than ever before, as the government has recently increased the amount of reserves that banks must have on hand to loan money; the best risks out there sometimes can’t get a loan nowadays, because the reserve formulas have been amended upward as part of the “financial reforms” of this administration. The rich would love to put more of their money in banks… …if the Fed didn’t cause the interest on savings accounts to be lower than the inflation rate… and if the government doesn’t take that money away from them in increased taxes.
So many options…
There are so many things the rich can do with their money. They can spend it, they can invest it, they can save it. They can hire others directly, or, through their own self-interested purchases and investments, they can enable others to hire people or otherwise benefit the public. And in all of this, no matter what the rich do, the government does get a secondary benefit, one step later.
State and local governments get revenue from sales taxes at the shops, the theaters, the home improvement stores. They get revenue from property taxes and income taxes on those properties, those businesses, and their employees. Every government depends on economic activity – on every sale, every investment, every employment, every raise, every success.
So why is it that whenever things get a little tight, the American Left’s first, last, and biggest proposal is always to increase tax rates, to remove deductions, to reduce the pool of money in the hands of those who have it, so that all these sources, and therefore their resulting revenue streams, dry up?
When taxes are already on the wrong side of the Laffer Curve (that is, when tax rates are already past the point of diminishing returns, as we know the American tax burden most certainly is at present), every tax increase, whether through rate increases or through the removal of deductions and credits (which the American Left usually describes as “loopholes” nowadays), depletes that pool and hurts everyone.
Increased tax rates and diminished deductions do not one thing, but many: They reduce the stream of funds into government at every level. They further increase unemployment, further weaken every sector from wholesale to retail, from discretionary to mandatory. Increased tax rates and diminished deductions make it harder, not easier, for government to do what it must: raise revenue to make good on its commitments, service the debt, promote the general welfare.
So… which side supports further contribution by the rich?
The Capitalist economic system – as designed by geniuses from Adam Smith in Scotland to Alexander Hamilton in New York, as intellectually developed and explained by economists from von Mises in Austria to Friedman, Williams, Sowell and Laffer over here in the States – brilliantly enables every single transaction to support both the private and public sectors.
Every purchase and every sale helps vendor and consumer alike, and every participant up and down the supply chain… and helps government at every level as well, through reasonable taxation on the profits of those transactions.
But every penny the government takes away from those private sector economic actors – rich or poor, corporate or individual – obviously diminishes the activity they can perform. Take away another 5% of their funds in lost deductions or higher tax rates, and you eliminate another 5% of their activity. Take away another 10%, and it’s another 10% that you’ve killed. Take another 15%, and you’ve crippled the economy by 15% more.
What’s our unemployment rate? Our effective, real inflation rate? Our savings and investment rates, these days? Those five, or ten, or fifteen percent of the funds of America’s “rich” could really help us out, if “the rich” were free to dispense them as they choose. Instead, the administration and its Pelosireidian leadership in Congress are determined to take that money out of the mix, leaving ever less in place to work the magic of capitalism.
In the American economy, every single transaction is a force multiplier. The more activity there is, the more the economy grows. Good for people, good for businesses, good for government.
But just as surely, every single reduction in the money that these economic actors have at their disposal is a force depressor. Every time government shrinks the amount of money they have at their disposal, they reduce the transactions upon which real people depend for their livelihoods, depressing not only the business’ operating revenue, but depressing the economy as a whole, reducing the tax receipts upon which government depends.
In short, when the Democrats call for “a balanced plan” between spending cuts and tax hikes, they are working against their own stated interests, because such tax rate increases and deduction reductions can only further reduce the eventual government revenues that the Left claims to be focused on increasing.
And yes, after two hundred years of history and plenty of experiments on all sides, everybody knows it.
So who is it that really supports the idea of “the rich” chipping in to “contribute their fair share?” It’s always been the Right. Only the conservatives have been focused on tax rate reductions that grow the economy and thereby enable the economic participation of the wealthy to be ever more beneficial to both society as a whole and the government coffers as well.
The American Left doesn’t really want “the rich” to contribute more. If they did, they would be calling for tax rate cuts, not tax rate hikes and the elimination of deductions. No, the American Left isn’t about fiscal discipline or growth, they’re about control, and punishment, and envy, and destruction.
The Conservatives recognize and support the contributions of the rich to our economy, and advocate programs to enable every seed of wealth to germinate and work its magic. Only the Right knows that the solution to our nation’s problems is for government to get out of the way and allow our mighty private sector to work its magic, unfettered by the red tape of government agencies, unbled by the bloodletters of greedy taxing bodies from sea to shining sea.
You want the rich to chip in, President Obama? You really want the rich to contribute their fair share, Minority Leader Pelosi and Majority Leader Reid? Well, that’s not hard.
As John Galt would say, “Just get out of the way!”
Copyright 2011 John F. Di Leo
John F. Di Leo is a Chicago-based Customs broker and international trade lecturer. He may not be rich, but he knows he never got a job from a poor person, and that nobody wins when you kill the goose that lays the golden egg, as the Pelosireidian Left has been striving daily to do, ever since they took power.
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FUBO.......and rich I’m not
How bout a brave conservative ask the question why 50% pay NO INCOME TAX?
Where is your sarcasm tag? Or are you serious?
They would be stupid, not brave.
The rich should pay for more bombs to kill third worlders, and more abortions?
Give us a number. Should the 'super rich' top 1% pay, let's say, 25% of all taxes? Maybe they should pay 30% of all taxes? How about the top 10%? Should they pay, let's say, 40% of all taxes? Maybe 50%?
Tell us, how much extra burden should they bear? Give us some numbers.
How about one brave congressman who would say thou shall not covet other people’s wealth.
There IS a law of no returns and the devil that is calling to raise the ceiling is obtusely an asshole and just, plain wrong
The “Rich” all ready give more the 50% of their income to the Government.
How about we have some REAL shared sacrifice. Why don’t the Progressive clowns, like the author of this article, give up their subsides and Government hand outs? How about they quit demanded everyone else pay for their free lunch? How about they finally make some “shared sacrifice”?
>>Where is your sarcasm tag? Or are you serious?<<
Did you read the article? Seriously, there is NO need for a sarcasm tag. We are all on the same page.
Read the article, people. It’s not what you might think by the headline.
The rich will “chip in” when they’re no longer scared witless of what this runaway socialist government is going to do to them. They’ll create the jobs only when they’re assured they won’t be punished for doing so.
Chip in for what Commie?? IT IS NOT you’re damn money, Stop Spending!
These damn Marxists could burn their way through all the money on the planet and it still wouldn’t satisfy them.
John F. Di Leo is a Chicago-based Customs broker and international trade lecturer. He may not be rich, but he knows he never got a job from a poor person, and that nobody wins when you kill the goose that lays the golden egg, as the Pelosireidian Left has been striving daily to do, ever since they took power.
I may be mistaken, but I believe the “rich” are citizens who are entitled to equal protection under the law.
Maybe some high-brow lawyer type can answer me this: Why is the income tax not ALREADY a flat tax? Where are progressive rates authorized?
I can’t find it.
Those that create value or wealth are a vanishing breed. The ‘rich’ today are those that can capture the greatest amount of value. However, there does not seem to be as great a return with this method.
Rentiers prevail. Producers wain.
How do you reverse the trend?
OK I will step and ask Warren Buffet, Bill Gates, Steven Spielberg, George Lucas, Tom Hanks, George Soros and other assorted limo libs to cough all they can stand instead of insisting on raising taxes on the rest of us.
Reading the article would be helpful...
“I may be mistaken, but I believe the “rich” are citizens who are entitled to equal protection under the law.
Maybe some high-brow lawyer type can answer me this: Why is the income tax not ALREADY a flat tax? Where are progressive rates authorized?
I can’t find it.”
Nice post and I agree!
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