Posted on 03/16/2011 8:16:24 PM PDT by neverdem
There Aren't Enough Millionaires
The rich can't fund our deficits.
This may sound like a liberal parody of conservative economic thinking, but let me put it out there: America’s problem is that the rich don’t have enough money.
There, I said it. Let’s rumble.
When it comes to the Scrooge McDuck set, the problem isn’t that they’re not rich enough, it’s that there aren’t enough rich — not enough to do what liberals want to do, anyway, which is to balance the budget by increasing taxes on them. Let’s deploy some always-suspect English-major math:
There are lots of liberal definitions of “rich.” When Pres. Barack Obama talks about the rich, he’s talking about people living in households with income of more than $250,000 or more, the rarefied caviar-shoveling stratum occupied by the likes of second-tier public-broadcasting executives, Boston cops, nurses, and the city manager of Lubbock, Texas (assuming somebody in her household earns the last $25,000 to carry her over the line). Club 250K isn’t all that exclusive, and most of its members aren’t the yachts-and-expensive-mistresses types.
Nonetheless, there aren’t that many of them. In fact, in 2006, the Census Bureau found only 2.2 million households earning more than $250,000. And most of those are closer to the Lubbock city manager than to Carlos Slim, income-wise. To jump from the 50th to the 51st percentile isn’t that tough; jumping from the 96th to the 97th takes a lot of schmundo. It’s lonely at the top.
But say we wanted to balance the budget by jacking up taxes on Club 250K. That’s a problem: The 2012 deficit is forecast to hit $1.1 trillion under Obama’s budget. (Thanks, Mr. President!) Spread that deficit over all the households in Club 250K and you have to jack up their taxes by an average of $500,000. Which you simply can’t do, since a lot of them don’t have $500,000 in income to seize: Most of them are making $250,000 to $450,000 and paying about half in taxes already. You can squeeze that goose all day, but that’s not going to make it push out a golden egg.
But like certain other exclusive clubs, Club 250K has an inner sanctum, a special club within the club, the champagne room of socioeconomic status. And that is Club 1: the million-dollar-a-year club. Not the millionaires’ club — lots of the people earning $1 million in any given year do not have $1 million in assets — but, still, a million a year, even in rapidly depreciating U.S. dollars, is not too shabby. But the trouble for liberals is, Club 1 is really, really exclusive: Only 0.2 percent of U.S. households have incomes that high, meaning that there’s only about 200,000 of them. And like Club 250K, Club 1 is bottom-heavy: There are a lot more $1 million men than there are $6 million men. And there are a whole heck of a lot more $6 million men than there are $60 million men.
You want to tax Club 1 to get rid of the deficit, you have to hit each of those 200,000 households with an average tax hike — not an average tax bill, but tax increase — of $6 million. And a lot of those Club 1 households don’t have $6 million in income to start with, much less $6 million left after the taxes they’re already paying.
Every time you raise the threshold for eating the rich, you get a much, much smaller serving of meat on the plate — but the deficit stays the same. The long division gets pretty ugly. You end up chasing a revenue will-o’-the-wisp.
So, what about Lloyd Blankfein and Charlie Sheen and Tiger Woods? What about these people? You can tax the striped pants off of them, but you won’t get enough money to balance the budget. If you’re doing it, you’re probably mostly doing it because it feels good. (And, yes, that does make you a bad person.)
Correction: You can try to tax the striped pants off of them. Lloyd Blankfein and Tiger Woods and Charlie Sheen have a lot of discretion about when, where, and how they get paid. Lloyd Blankfein does not look at a pay stub every two weeks and shake his head sadly, and make sad little sighing sounds; guys like that do something about it. They move to low-tax jurisdictions. They defer. They incorporate. They set up enormous trusts to keep their ne’er-do-well nephews in boat shoes and gin and political office while avoiding taxes. They lawyer up. They will play the game, and they are better at it than you are.
So, how about taxing people who make less than $250,000? That’s probably whom you want to tax, since they are the ones who have the money (Counterintuitive, I know.) The Bush “tax cuts for the rich” cost the Treasury about $800 billion in forgone revenue; the Bush tax cuts for the middle class cost trillions – 2.2 of them, to be precise.
Repealing all of those Bush tax cuts, for rich and middle class alike, gets you about $3 trillion — over ten years. The deficit is running from a third to almost half that every year. Will not balance. Does not compute.
Just as supply-siders are naïve to think that tax cuts are going to magically empower us to grow our way out of this mess, progressives are naïve to think that there is some magically delicious pot of Lucky Charms at the end of the IRS rainbow that is going to get us out of this in some kind of obvious or straightforward fashion. No, tax cuts do not pay for themselves, but supply-side effects are real things, and jacking up tax rates to the level necessary to sustain current levels of government spending is going to have real economic consequences, some of which could in aggregate mean that you don’t collect the taxes you thought you were going to collect. This is doubly true when you already have the second-highest business-tax rate in the developed world and other significant economic challenges, like a backward K–12 education system making the work force less competitive and public infrastructure that is being neglected in favor of gimmicky political shenanigans.
Capital is sensitive — it just wants to be loved! — and it will go where the love is, where it can be fruitful and multiply. Setting trillions of dollars’ worth of it ablaze on the altar of Washington’s self-importance every year is not going to get it done, and there simply aren’t enough rich people for us to pillage or enough loot to make it all work. We have finally, as the lady predicted, run out of other people’s money.
— Kevin D. Williamson is a deputy managing editor of National Review and author of The Politically Incorrect Guide to Socialism, just published by Regnery. You can buy an autographed copy through National Review Online here.
What about the Billionaires like Oprah?
Oh wait, she doesn’t build schools here...
Michael Moore said there are trillions of dollars out there, which are in the wrong hands, he says.
Michael Moore declared that all of this money should be part of our natural resources, to be used to build the economy, etc. etc.
Would Michael Moore lie or distort the truth??????
That is what marxism is......destroy the vast middle class of a society——its where enough money and networth meet with enough numbers of population to obtain real wealth.
didnt K.Marx desire to destroy the middle class with vast waves of inflation, interest and taxation.......
deja vu all over again.
everyone should pay taxes. when I made minimum wage I paid my fair share, everyone needs to help out. The govt needs to cut spending toooooooo! The poor are a sad excuse for not paying taxes..
Could Michael Moore cause a tsunami?
In real world goods and service have to be produced and, if there not enough economic activity, there will be nothing to distribute “justly” or otherwise! Also, if you increase tax rate, you just might shrink the taxpayer base and get less tax revenue!
Silly, the whole thing is a scam. The Democrats use ‘taxing the rich’ as a scam for getting us to accept regressive taxes on ourselves, which is the real revenue. Liberal Maryland is a great example raising the sales tax with two taxes ‘on the rich’. Clinton raised the gas tax and taxes on SS benefits. Obama wanted cap and trade.
If Obama really believed taxes on the rich fixed anything he would have pushed them when he had complete control of congress. It’s all a scam, you know the ‘fairness’ scam to make you think you got a good deal???
I don’t think there is enough dough in the world to fund our deficits.
The middle class and user fees is where the real money is, income taxes is a leverage. A dollar per month per phone is how much money, a nickel on each email is how much money, etc,etc.
No, it means they have to cut spending, period. Government is not a perpetual motion machine that can go on and on putting out more than there is to put in. It simply collapses under its own spiral of debt and spending.
Government deficit spending has become the heroin of politicians of all stripes. The addiction is strong. Every injection causes more addiction and more damage to the body. But the pain of stopping is far worse. So the injections continue until death.
And then the addiction is done.
Does any politician have the courage to lead the way off our current death spiral before death? Or even more importantly, is the electorate have the courage to elect a politician that is willing to stop the injections and suffer the pain of stopping the addiction?
Our deficits are high treason.
The best response to the problem of the poor and poverty-stricken - make access to the system of income distribution known as “capitalism” available to one and all.
And to do that, make a bigger pie. The wealth of the planet is there for conversion to useful things for the population, and in doing so, fund the continued growth and expansion of that magic source that feeds so many, and moves people up the hierarchy of needs, beyond the most basic of food, shelter and human contact, to the more creative levels and refinement of thinking.
What we have as common and everyday things in terms of being far beyond the fulfillment of the more basic needs, would be envied by kings of old. But it was precisely the sense of entitlement that those kings of old exulted in, that prevented the sharing of growth and improvements in the standards of the day for ALL people, that kept the kings themselves in a relative state of impoverishment.
We have in this world a new set of the elite, who think nothing of dissing their fellow man once they have achieved a level of superiority in terms of wealth and influence, that they should always maintain the elevated position, and block anyone else from sharing, no matter how much talent the less favored may exhibit. These are as despicable as the despots and tyrants of the past, the more so because the lessons of history have been somehow escaped them, and they are terrified of the consequences of the application of these lessons.
Somewhere between a totally self-absorbed hedonism, and the most saintly (but ultimately self-defeating) altruism, there is something that may be called enlightened self-interest, in that by allowing fellow human beings to do well, the benefactor himself also does well - even better than he had been.
The rich: Anyone who is not a member of a labor union.
But Michael Moore says the 400 richest Americans own half of everything. Lefties are repeating it over and over, claiming it’s been proven. What if we just killed them all and took their money and things? Then we’d fix everything.
Here is an idea I thought of over the weekend. If the Libs/Progressives/Socialist want the top tax bracket back to what it was in the 1950-1960, then we roll back government to those levels also. Any agency that has been founded and all welfare programs will need to be rolled back.
I would love to hear them scream about that.
Then there are groups like NPR that tax the middle class to support wealthy liberal elite entertainment...
What we know for sure is they have their hands in our pockets...
[[the problem isnât that theyâre not rich enough,]]
The problem IS that the whining left are consumed with jealousy- they see people richer than themselves, and imediately boil with envy- Most Americans are sick and tired of the left’s whining on this issue- Jealousy is an ugly ugly trait- the rich ALREADY pay nearly 75% in taxes- LEAVE THEM ALONE! STOP WHINING! AND MIND YOUR OWN BUSINESS LEFT!!! IF YOU HAVEN’T GOT ENOUGH $$ STROP PISSING AND MOANING AND GO EARN IT FOR CRYING OUT LOUD- AND STOP TRYIGN TO TAKE IT AWAY FROM EVERYONE ELSE!!!!!!!!!!
And YES I’m yelling! Sick and tired of the jealousy of the left and their constant whining about rich folks
right nowe as we speak, congressman anthony wiener is on screaming about the rich and looking to take away even more from them- I wish he and his ILK qwould just shut the hell up- He’s dominated the conversation- cutting off backman and shawn- Cant stand listenign to mindless screamers liek that
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