Skip to comments.'Soak the rich' a false formula
Posted on 02/20/2012 10:53:14 AM PST by Graybeard58
It's February, so President Obama has unveiled his budget proposal for fiscal year 2013, which begins Oct. 1. Mr. Obama, who has presided over the first trillion-dollar budget deficits in American history and proposes to spend $3.8 trillion in his new budget, let it be known again that increasing taxes on "the rich" is his method of choice for raising revenue.
The president may think this will get the nation out of the fiscal crisis he worsened, but in reality, he is setting the stage for more budget shortfalls in the unlikely event this budget, unlike the last one, gets a favorable reception in Congress.
Most liberal politicians see increasing taxes on high-income earners as a budgetary cure-all. The theory is that since such people have so much money, they can afford to pay more in taxes, taking the heat off those with smaller incomes and allowing the government to engage in lavish spending, free of worries about a fiscal crisis. This, they argue, is a matter of fairness.
Talk about an utterly short-sighted view.
The wealthiest people in the country tend to have the most volatile incomes because they are heavily tied to investments, and are at the mercy of the stock market. Thus, when government relies on the "soak-the-rich" approach for a substantial portion of its revenue, it will face a fiscal crisis every time the economy takes a hit.
A Feb. 14 Wall Street Journal report indicated that to generate $1.7 trillion in new revenue over the next decade, Mr. Obama's budget plan would allow the Bush era tax cuts for families bringing in more than $250,000 annually to expire. The president also advocated increasing the tax rate on earnings these taxpayers get from dividends, from 15 percent to 40 percent.
The Journal noted these steps "amount to the latest installment of a re-election campaign platform (Mr. Obama) laid the groundwork for in a December speech in Kansas that called for restoring economic 'fairness.'"
The president can talk all he wants about how "fair" his plan is, but given the current economic uncertainty, the seeds will have been planted for more deficits if it's enacted.
A case in point is Connecticut's latest fiscal difficulty. Gov. Dannel P. Malloy, who has modeled his approach after Mr. Obama's more than any first-term governor elected in 2010, attempted to erase a record deficit with a record tax increase, yet a deficit remains. Why? Tax revenues, especially from high-income earners, came in well short of expectations. (The spending increase didn't help matters, either.)
President Obama may think he is the champion of "fairness," but the facts make clear this is fair to no one but candidate Obama as he seeks to portray himself as "everyman."
A case in point, closer to home for me is Illinois, where the rat governor and rat legislature raised taxes on businesses and individuals and yet our state economy is much worse off for it. Less revenue and even more spending of money that we don't have.
Democrats never learn.
Ping to a Republican-American Editorial.
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The top 10% pay 70% of all income taxes yet the “rich” aren’t paying their “fair share.” What is their “fair share?” 100% of all income taxes? The issue, as always, is government spending. It is completely out of control. We are layering transfer payment on top of transfer payment. People are dropping out of the workforce because they can survive on transfer payments. If the rich ended up paying all taxes, we still would have a deficit, as this article points out, because spending would outpace revenue even at the higher level.
if we confiscated every penny of wealth from “the 1%” we could run the Federal Government for something like 69 days.
The “rich” are the new Jews, and are apparently just as universally despised as were the Jews of 1930’s Europe.
Never mattered. What counts is that we identify a scapegoat for all of our troubles and unite a nation in hatred of them, so that we can justify theft, government takeover of industry, ouster from their homes, theft of all their personal property, murder by mob, forcing the “rich” to wear an outward symbol of their status, sending them to labor camps. “pay your Fair share,” is the new “Judenrein.”
Sounds slightly familiar.