If you say something enough times, people will begin to believe it. Being the President of the United States gives Obama a grand stage to say his most favorite phrases over and over again in the hopes that it will stick in the minds of voters who will count it as unquestionable, verified, economic truth.
The tiny cancer that Obama’s chosen to implant in the national dialogue this election is, of course, raising taxes on the rich is the right thing to do. It’s the way to get a handle on our $16 trillion national debt (that’s twelve zeros, people); it’s what needs to be done to spur the economy; it’s the only way to generate enough revenue to pay for the $2 trillion Obamacare that leaves 30 million uninsured.
The main reason Obama and the Democrats feel so strongly about raising taxes on the rich is to generate money that they can then spend, and then raise federal revenue. How exactly they think their plan will do that doesn’t make much sense to me, but you can be sure every time one of these charismatic dingbats stands in front of a microphone, more voters are won over to their side.
To start, “the rich” (they also answer to “millionaires and billionaires,” “scum” or “job creators”) are those individuals who make $250,000 a year or more. In America we’re lucky enough to have almost three million of them running around, but not even 10-percent of them make a million dollars or more. Nine-tenths of the people who are going to be hit with this tax intended for millionaires and billionaires don’t even make a million dollars.
This is like your neighborhood police promising to crack down on the local murderous gang, then coming back with one gang member and nine kids who spit their gum out on the sidewalk. Mission accomplished!
Criminals make a great proxy for the rich because that’s how Democrats portray them.
President Obama has the opportunity to make his plan specific to actual millionaires, instead of encompassing lots of small business owners who fall within this range. Either way, it’s a farce. Are we seriously to expect that less than 300,000 millionaires are going to provide even close to the tax revenue needed to fund Obama’s unicorn ranch? Judging by the vacation habits of the First Family, we are going to need a lot of tax dollars to fund just that aspect of the next four years if Barack Obama is reelected.
The reality as of now is that those who suffer the consequences of Obama’s trigger-happy class warfare are going to be small business owners and other professionals like realtors, freelancers, and small medical or law practices.
But there’s another flaw. We have been given little evidence to convince us that raising taxes on the rich (whoever they are) won’t have the opposite effect of lowering federal revenue. What the Democrats are doing when they hike up taxes on those that value their capital is creating an incentive to hide as much of that capital in tax-exempt places as possible.
When Presidents Reagan and George W. Bush cut taxes (Reagan lowering the top rate to 28-percent in 1982), government revenue increased. Allowing people to keep more of their money tends to encourage people to relax, making the effort of hiding their capital in foreign countries and other tax-exempt places too much of a hassle. To add, increased economic production creates more taxpayers and allows the existing ones to profit.
With Obama’s tax plans, eventually the curve of increased taxes equaling increased revenue will begin to reverse. People won’t work as many hours or take certain small promotions for fear of moving to a higher tax bracket. Or what we should really fear in our current economic state: employers will have less money to pay employees.
England recently raised taxes on the rich and –what a surprise– revenue decreased. The Telegraph reports: “The Treasury received £10.35 billion in income tax payments from those paying by self-assessment last month, a drop of £509 million compared with January 2011.” The story also notes the peculiarity of the income tax in that, because it is earned money, people are more likely to weasel out of paying what the government estimates they’ll pay.
Of course the Democrats’ go-to anecdote and justification for raising taxes is the Clinton years. To compare the Clinton years with our current situation is preposterous. The Internet took off during the 90s and made doing business easier and less expensive. Productivity skyrocketed. To do business during that time and pay slightly more in taxes was hardly painful to businesses or individuals.
We’re facing an opponent who gets support from gullible Americans who will support any policy because it sounds good and humanitarian and just. Whether the policy is the minimum wage, rent control, or class warfare, people will eat it up without asking hardly any economic questions because on the surface, it sounds like a good idea. It’s our job to make sure the public understands the principles of economics; everything is not as it appears.