Political and economic lexicon is very important, and something that liberals had the advantage in that department over conservatives for decades, using the "populist" language to cover up their "sweet" lies. Just recently, Obama and the Democrats subtly change the word "taxes" into "revenues" as if the two are automatically synonymous or the same (i.e., presumption that higher marginal tax rates directly equal higher government revenues) which is absurd, as often it results in exactly the opposite.
It's time to treat them to the their own medicine and adjust the lexicon, but based on the truth instead of the liberal lies.
For instance, the term "revenue" itself should be derided as the "[increased] tax on economic growth" and additional "tax burden on jobs creation".
The term "tax cut" for the "rich / billionaires and millionaires" sets an "anchor" - the impression that the government revenues were reduced / "cut" from some higher "natural" rate that liberals decided on for a time - and should be transformed by Republicans into "reduction in tax on economic growth" and "tax relief" for the "jobs creators / jobs producers" and the "working middle class".
The "paying their fair share" argument should be countered to name what number would constitute the "fair share" that the top percentiles of earners should pay as a percentage of total government "revenues" - it's pretty much guaranteed that the number they come up with would fall far short from the actual number top earners pay.
The term "government investment" (on "infrastructure," education, healthcare, environment) should be countered with "out-of-control, profligate, ill-conceived, counterproductive, open to fraud, waste and abuse, and uneconomically expensive government spending of taxpayers money on useless projects 'to nowhere'".
Given the obviously inadequate and critically dismal performance of government services that are constantly growing in cost, such as education and health, this terminology will find a receptive ear with the public, just like Reagan's rhetoric found the support of those who became and remained "Reagan Democrats."
From The Democrats' Big Tax Lie - TDB, by Michael Medved, 2011 July 28
The trouble with this rhetorical approach is that it relies on an obvious and embarrassing falsehood: far from paying the “lowest rate in 50 years," top earners actually paid at the current rate or significantly lower for most of the time in the last quarter century. ..... < snip > ..... Even a cursory glance at the historical records make it clear the amount of revenue flowing to the federal government bears little connection to the tax rates applied to the wealthiest Americans. In 1951, for instance, top-earning families (those who earned more than $400,000) paid a confiscatory top marginal rate of 91 percent, but the government collected just 16.2 percent of the GDP in revenue. More than 30 years later, during the brief three-year interlude when taxpayers enjoyed the low Reagan top rate of 28 percent, the feds took in vastly more total revenue - an average of 17.9 percent. In other words, contrary to the simplistic assumption that raising tax rates always increases revenues, a rate of 91 percent brought in less to the Treasury by every standard than a 28 percent rate. Alan Reynolds, a veteran economist with the Cato Institute (and a frequent guest on my radio show) isolates the figures for individual income-tax collections (excluding corporate levies, capital-gains tax, estate tax, and other sources of revenue) and shows that higher top rates historically bring somewhat lower - not higher - tax collections. Between 1952 and 1979, the top tax rate ranged from 70 percent all the way to 92 percent, but revenues from personal income tax amounted to only 7.8 percent. From 1988 through 1990, with the highest individual rate 28 percent, taxpayers actually provided more funds, not less - 8.1 percent of GDP. Reynolds concludes: “The trendy talking point of blaming projected deficits on ‘tax cuts for the rich' is flatly absurd. ..... < snip > ..... The most recent numbers (updated in October 2010) show that the top 1 percent of tax returns covered an amazing 38 percent of all income taxes - nearly doubling the share of the total income they earned (20 percent). The top 5 percent of taxpayers (earning above $159,000) earned 35 percent of all income, but paid the big majority of all income taxes - 59 percent. ..... < snip > < snip > ..... The Democratic line about “the lowest rate in 50 years" effectively reinforces two important liberal themes: first, that the rich don't pay their fair share to support the operations of government, and second, that hiking rates on undertaxed wealthy people offers a painless, eminently fair way to increase revenue and reduce the deficit.
From Time to Man Up - B, by Gene Epstein, 2011 August 06
These tax hikes have been scored by the president's own Office of Management and Budget as contributing a bit less than $1 trillion in reducing the debt over the 10 years. Even without discounting that figure as probably erring on the high side, it barely makes a dent in the long-term fiscal problem. Unless the president is willing to consider far more ambitious cuts, especially on the entitlement programs, he will have to hike taxes on virtually everyone with an income. CBO FIGURES SHOW that the full burden of the federal tax is about as progressive as it was in the late 1970s; the richer the income group, the greater the share that it pays. All income groups pay a somewhat lower effective rate than they used to, but by far the steepest proportionate drop has been among the lowest 20%, which paid just 4.2% of their income in taxes in 2006 and 2007, the most recent years for which figures are available. The top 1% of income recipients paid 30.4% of their income in federal taxes in 2006-07, the highest effective rate. That figure includes all ways the Internal Revenue Service can make claims on income, including corporate income taxes, of which the top 1% pay a disproportionate share, because they own a disproportionate share of stock. (The 30.4% excludes estate taxes.) In order to be in the top 1% in those two years, you had to earn at least $350,000, a figure that might not even qualify you for the president's targeted group of "millionaires and billionaires." (Millionaires here being defined as households that earn at least $1 million a year.) But because there are plenty of real M&Bs in the top 1%, this income group did account for 28.2% of all federal taxes paid in 2006-07. That's an impressive number, but regardless of how much it is raised, it won't cover the soaring cost of government, especially when you consider that the aggregate tax take already falls far short of paying those costs. You have to hike taxes on the top 20%, who earned a minimum of $75,000 in 2007, and even on the next quintile, who earned a minimum of $50,000. ..... < snip > ..... < snip > The $11.7 trillion also included Obama's own proposal for raising rates on the two top income brackets and increasing the estate tax.
The truth is out there. The conservatives / Republicans just have to learn how to communicate it effectively, to counter the Lies and the Lying Liars of the Left.
“...The Democratic line about ‘the lowest rate in 50 years’ effectively reinforces two important liberal themes: first, that the rich don’t pay their fair share to support the operations of government....”
I think many conservatives believe in the fairness of a flat tax, by which the rich would pay the same rate as someone making $100,000 a year at his job. But how do we answer Warren Buffett’s observation that he pays federal taxes at half the rate of his office staff (who he says make around $100k a year)? It’s not just a question of whether taxing the rich will get us out of debt—obviously it won’t—it’s a question of fairness. Why should a man who declared a net income of $39 million last year pay taxes at half the rate of his staff?
“Rahn Curve and, similarly, the Hauser’s Law in conjunction with the Laffer Curve, describe the practically “optimal” tax rates.”
As much as I agree with your post, there is a more important topic that finding the optimal tax rate.
The famous Laffer Curve shows that when government has a zero tax rate, it gets zero revenue. When it has a 100% tax rate, it gets 100% of nothing and thus has zero revenue. The curve bulges in the middle to show that there is a rate of taxation that produces the greatest amount of revenue to government.
Conservatives argue that when tax rates are too high, lowering the rate will increase government revenues. This implies that tax rates had been above those that produced the bulge. Lowering the rate moves us down towards the bulge in revenues.
Liberals argue that if only we could increase tax rates, we could have more revenue to spend on “vital programs”. They assume that tax rates place us below the bulge.
But both of these positions miss a fundamental point. Consider that when there is zero government, the resulting anarchy makes society unlivable and thus destroys liberty. But when government takes over every single function of life, there cannot be any liberty at all. The preamble of the Constitution tells us that we form a government to “secure the Blessings of Liberty to ourselves and our Posterity”. The Constitution then goes on to describe a structure of limited and enumerated powers. Too little
government as well as too much both destroy liberty. So, obviously there is an optimum level of government, a bulge in the middle, of optimum liberty. I call this the Liberty Curve.
In advocating lower tax rates, Conservatives are advancing the wrong aspect of government. Our obligation to ourselves and our Posterity is not to optimize the amount of money the government has to spend by optimizing tax
rates, but to optimize the level of liberty that each citizen has by optimizing the level of government! As government grows, our liberty must retreat. But for our own protection, we must have some level of government.
I know that level is far less than we have today.
We would not be in the mess we are currently in if our focus had been on liberty as compared to spending. Even the idea of running a perpetual deficit destroys liberty, for it places all future taxpayers in a form of debt-servitude from which we cannot allow escape, lest government be unable to service the debt incurred by those long dead.
We can start down the Liberty Curve by spending less than we take in. We are not anywhere near doing that with the current debt and budget debate going on in Washington at this very moment.
Futher, the Rahn Curve [1] shows us that when tax rates get above about 20%, people who do have some measure of control over how they structure their financial affairs take active steps to decline to pay more in taxes. It is just a fact of life that any politician attempting to increase revenues by raising taxes will be disappointed, and any plans and budgets that depend on those higher revenues will fail.
The only way out is to spend less and shrink the size of government. The only way out of the debt morass is to boost wealth creation. The only way to boost wealth creation is by giving entrepreneurs more liberty to create
more wealth and jobs. But government cannot pick and choose who will start the next Apple or Microsoft. But it can pollute the risk-taking environment so that nobody will be willing to invest their time or money in new ideas.
When government tells such people beforehand that you can only deduct $3,000 of your losses, the more government tells us that it will take of the gains, the fewer people there will be who will try. And right now, we cannot have too many people starting up or will fund new business ventures! So, apart from cutting government spending,
we need to do something that big government types just refuse to do: give people more liberty.
[1] The Rahn Curve and the Growth-Maximizing Level of Government
http://www.youtube.com/watch?v=uj6lRFXC5rA