Skip to comments.The Invincible Lie: Part II (Thomas Sowell)
Posted on 07/10/2012 1:29:53 PM PDT by jazusamo
Nothing produces more of a sense of the futility of facts than seeing someone in the mass media repeating some notion that has been refuted innumerable times over the years.
On July 9th, on CNN's program "The Situation Room" with Wolf Blitzer, commentator Gloria Borger discussed President Obama's plan to continue the temporary extension of the tax rates established under the Bush administration except for the top brackets, where Obama wanted the tax rates raised.
Ms. Borger said, "if you're going to lower the tax rates, where are you going to get the money from?"
First of all, nobody is talking about lowering the tax rates. They are talking about whether or not to continue the existing tax rates, which are set to expire after a temporary extension. And Obama is talking about raising the tax rate on higher income earners.
But when Ms. Borger asked, "where are you going to get the money from?" if you don't raise tax rates, that assumes an automatic correlation between tax rates and tax revenues, which is demonstrably false.
As far back as the 1920s, a huge cut in the highest income tax rate from 73 percent to 24 percent led to a huge increase in the amount of tax revenue collected by the federal government. Why? Because investors took their money out of tax shelters, where they were earning very modest rates of return, and put their money into the productive economy, where they could earn higher rates of return, now that those returns were not so heavily taxed.
This was the very reason why tax rates were cut in the first place to get more revenue for the federal government. The same was true, decades later, during the John F. Kennedy administration...
(Excerpt) Read more at creators.com ...
Higher tax rates are a win for Obama because people who will vote for him are not sufficiently informed to realize it will mean lower revenue. They are motivated by envy and hatred; their false belief that “the rich” will pay more taxes with higher rates makes them happy. They don’t care that, with higher rates, “the rich” will withdraw investment from productive to unproductive uses - which means fewer jobs and fewer products for everyone. They just want to believe that, somehow, their man Obama is hurting “the rich.”
Dems don’t care about the revenue. They only care about “fairness.” To them, the whole purpose of taxes is to bring higher earners down.
If you ever find yourself in discourse with someone over taxes, start off by asking them why we have income taxes. You’ll save a lot of time if you get that answer up front. If they frame it as “fairness,” discussion of tax rates vs. tax revenues won’t have any effect on them, so don’t waste your time.
Thanks for the pings jaz. Right on the mark again.
A great many of them have the intellectual, moral, and emotional development of four-year-old children.
The MSM doesn't understand how bad economic mistakes make them look.
It's as if a sports reporter talked about how many home runs a football team made - or how many downs were left in a tennis match. If the MSM allowed a sports reporter to report like that they'd look stupid. This is the same.
The MSM wants credibility back? Their work is cut out for them... Thanks Mr. Sowell.
Then there are many that know but are writing to support their left leaning editors and publishers or their own leftist bias.
We won't be hearing anything in the MSM about Obama’s admission that Dr. Sowell pointed out, we'll only hear them praising him about raising taxes on the “rich” to make the system fair.
Romney doesn’t get this either. Just today he was on the Hannity radio show and actually said this incredibly stupid remark on taxes: He wanted to lower the corporate tax rate but limit deductions because “we have to pay for it”.
He doesn’t get it! Mitt needs to reach out to Dr. Sowell and/or Dr. Williams for economic advice.
I am on your ping list twice please remove me once!
I have a bunch of Dem friends and family members who are adamant that rich people pay no taxes. Quoting facts to them does no good. Because they want to believe the lies.
None so blind as he who will not see.
A good friend of mine who holds liberal beliefs about taxes was absolutely stunned when I referred her to IRS data about what percentage of taxes are paid by the top 10% of earners.
Yeah, I referred the same data to a close friend of mine a few years ago. He looked at me for about ten seconds and then said “ I don’t believe it.” Because he didn’t want to believe it. But of course, he’s an arch-Dem...many of whom firmly believe the world is against them. That’s why they’re Dems. Tearing down the edifice of lies that is the Dem Party would destroy the little bubbles their constituents have built around themselves.
All your money are belong to us!
GIBSON: All right. You have, however, said you would favor an increase in the capital gains tax. As a matter of fact, you said on CNBC, and I quote, “I certainly would not go above what existed under Bill Clinton,” which was 28 percent. It’s now 15 percent. That’s almost a doubling, if you went to 28 percent.
But actually, Bill Clinton, in 1997, signed legislation that dropped the capital gains tax to 20 percent.
GIBSON: And George Bush has taken it down to 15 percent.
GIBSON: And in each instance, when the rate dropped, revenues from the tax increased; the government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down.
So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?
OBAMA: Well, Charlie, what I’ve said is that I would look at raising the capital gains tax for purposes of fairness.
We saw an article today which showed that the top 50 hedge fund managers made $29 billion last year — $29 billion for 50 individuals. And part of what has happened is that those who are able to work the stock market and amass huge fortunes on capital gains are paying a lower tax rate than their secretaries. That’s not fair.
And what I want is not oppressive taxation. I want businesses to thrive, and I want people to be rewarded for their success. But what I also want to make sure is that our tax system is fair and that we are able to finance health care for Americans who currently don’t have it and that we’re able to invest in our infrastructure and invest in our schools.
And you can’t do that for free.
OBAMA: And you can’t take out a credit card from the Bank of China in the name of our children and our grandchildren, and then say that you’re cutting taxes, which is essentially what John McCain has been talking about.
And that is irresponsible. I believe in the principle that you pay as you go. And, you know, you don’t propose tax cuts, unless you are closing other tax breaks for individuals. And you don’t increase spending, unless you’re eliminating some spending or you’re finding some new revenue. That’s how we got an additional $4 trillion worth of debt under George Bush. That is helping to undermine our economy. And it’s going to change when I’m president of the United States.
GIBSON: But history shows that when you drop the capital gains tax, the revenues go up.
OBAMA: Well, that might happen, or it might not. It depends on what’s happening on Wall Street and how business is going. I think the biggest problem that we’ve got on Wall Street right now is the fact that we got have a housing crisis that this president has not been attentive to and that it took John McCain three tries before he got it right.
And if we can stabilize that market, and we can get credit flowing again, then I think we’ll see stocks do well. And once again, I think we can generate the revenue that we need to run this government and hopefully to pay down some of this debt.
In case anyone needs it, here is the source that I used:
Thanks! My point illustrated by The Won himself.