Kerry isn't as ignorant on economic matters as he sounds....

Townhall.com ^ | April 9, 2004 | Neal Boortz

[84rules]

...but he certainly thinks that you are.

A caller to my talk show earlier this week was trying to explain his support for John Kerry. He particularly liked Kerry’s plan to increase taxes on the highest income earners. It was an explanation only a Democrat could love. “If the government takes more money away from the rich,” he said, “then the rich will have to work harder to get that money back, and this will increase productivity and help our economy.”

If this caller is right armed robbery should be looked at as a positive influence on our economy. The more the thugs steal, the harder their victims work to replace it, and the more productive our economy becomes. Maybe this is whyour Democratic friends seem to be so soft on crime. Parole and probation can be used as tools to boost our economy.

The truth, of course, is just the opposite. Kerry’s plan is to raise taxes on the top two percent of income earners. Any psychologist who is not employed by government will tell you that you get more of the behavior you reward, and less of the behavior you punish. Punish people for their economic activity and they will reward you by slowing that activity down.

I just can’t bring myself to believe that John Kerry is as economically vapid as he sounds, but he certainly believes that many voters are that stupid, and more. Kerry is merely using the rhetoric of class warfare, an appeal to those who live lives steeped in envy of others who have worked harder and smarter and have thus accumulated greater wealth than they.

Perhaps there are a few people reading this column who actually believe that higher taxes on the evil top two percent of income earners would be a good thing. Are you open to a few facts and maybe some new information?

First of all, just who are these people who are making all that money? Many of them are the small businesses in America who account for over 75 percent of all jobs. Have you ever heard of a “Sub-S” corporation? That’s a small business entity structured in such a way that business income is reported on the personal tax return of the owner. There are literally millions of these Sub-S corporations in the country … small businesses with more millions of employees. Since these business profits are reported on individual income tax returns statistically these businesses appear as nothing more than individuals with large incomes. It is these businesses that Kerry wants to hit with his tax increase. Just how dothink these businesses will come up with the money to pay the additional taxes? By cutting somewhere else, that’s how.

Let’s say you are a Sub-S corporation with five employees. Kerry gets elected and your taxes go up by about $35,000 a year. Perhaps the easiest way to recoup that loss would be to cut back on some capital expenditures and expansion plans, and fire your least productive employee. How many employees of these small businesses will be laid off to satisfy John Kerry’s class warfare designs?

Small businesses are the heart of the American economy. John Kerry wants to punish them for their success. Do you really think that’s a plan worth supporting with your vote?

Kerry also wants to replace the tax on corporate stock dividends. In other words, he wants corporate profit to be taxed twice. Tax it once when the corporation reports its earnings to the government, and tax that profit again when it is distributed to the (shareholders) owners. Since the tax on dividends was erased more people have become investors. And why not? The potential reward for this activity has been increased. What do you think happens when the government starts punishing this behavior?

We can’t undo years of government economic mis-education in 950 words, but there is room to dissect a bit more of Kerry’s class warfare rhetoric.

Kerry says that the Bush tax cuts shifted much of the U.S. tax burden “from wealth to work.” This statement was designed to make you believe that only working people have to pay taxes; that the wealthy are somehow getting a free ride. It’s an income tax, my friends, not a wealth tax. The top one percent of income earners still earn about 17 percent of total reported income, but they’re paying 37 percent of all income taxes. In the meantime, the bottom 50 percent of income earners have been almost completely removed from federal income tax rolls. Tell me again, Mr. Kerry, how the burden is being shifted?

Another Kerry rhetorical gem: “"He [President Bush] made a clear choice: To pass the bucks to the privileged while passing the buck to our children," Just how, pray tell, were bucks passed to the privilege? This is another great misconception about tax cuts that is eagerly nourished by the left. No money is “passed.” The people who actually earned that money are simply being allowed to keep more of it! The left loves to portray a tax cut as some sort of a gift. What would you say to someone who steals your wallet and car, and then hands you back a few bucks so you can get home on the bus? Gee, mister. Thanks for the gift?” Then we have referring to the hard working Americans who have reached the upper income levels as the “privileged.” Simply more class warfare rhetoric. They worked hard and exercised their power of choice wisely to get there. This “privileged” nonsense is designed to make it look like they’ve received some favor denied to the rest of us.

The opportunity to work hard, make good choices and prosper is denied nobody. The willingness to do so, however, seems in short supply.

Neal Boortz is a lawyer and nationally syndicated radio talk show host.

©2004 Neal Boortz

[84rules]

Excellent article. I wasn't aware of the Sub-S corporation angle. This should be circulated as much as possible.

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