I begin this posting on April 18th, Tax Day 2011, with a simple economic fact: Unless you operate a Ponzi scheme, or engage in armed robbery or some other form of actionable illegal behavior, you do not get rich by making others poor. Simple, huh? In fact, Sir Winston Churchill had a famous quote on the subject. He said, "Trying to make oneself rich by making a rich man poor is like standing in a bucket and trying to pull yourself up by the handles." An Englishman said that! It would be reasonable to assume that everybody, and I mean everybody, recognizes this pronouncement as fact. Reasonable, yes. Unfortunately, such is not the case.
As we learned from our Campaigner-in-Chief on April 13th, during his most recent "Major Policy Speech of the Week," the wealthy in this country aren't paying their fair share. They need to pay more so that Obama can redistribute it according to his progressive agenda. After all, he said, they can afford it. No matter that the top 1% of wage earners in America pays nearly 40% of all income taxes. And the top 5% pay more than 70%. And the bottom 53% pay only 3% of all income taxes collected. Pay attention Mr. and Mrs. and Ms. America, 47% of Americans pay no income tax at all! In fact, many get a redistribution check from the Feds due to "Earned Income Tax Credits" and other exemptions and deferments. No, the "rich" aren't paying enough according to Obama, and he intends to almost (actually, not almost…not even close) balance our Federal budget in the next 12 years by imposing on millionaires and billionaires increased taxes while simultaneously reducing or eliminating altogether their onerous, unearned and unfair deductions which they should never have been granted in the first place by those evil Republicans. And by "millionaires and billionaires" he means individuals making $200k a year and married couples pulling down $250k per annum. That oughta' fix them. Oh, and by the way, talk about the "marriage penalty." Two people living together and pooling their incomes could earn $399,999 per year in total before being hit with Obama's new tax sledgehammer. Yet, two folks who are married can only earn up to $249,999. Is anybody out there paying attention but me?
So, in summation, those slimy capitalists are trying to keep too much of the money they've earned, and they need to be punished! Class Warfare! Those of you who believe this would be a good idea, consider the following:
80% of those earning $200,000 per year, the threshold at which one becomes "rich" according to Obama, operate small businesses incorporated under sub-chapter S of the income tax code. That means what they earn via their company passes directly through to them personally, and then they are taxed on that profit. If we as a country take more of the money through taxation these entrepreneurs earn, that will necessarily leave them with less to reinvest in their businesses, and less to pay those they might hire. In other words, the less they're left with the less they have to plow back into their businesses and, indirectly, into our Country. If that extra money is confiscated by the Government so that it may be redistributed according to some leftist ideology, it cannot be used to create the jobs we sorely need to get us out of this recession. Of course, those running things in D.C. who have never created a job, managed a business, signed a check on its face or struggled to meet a payroll, including our brilliant young President and 93% of the very nice folks in his Cabinet, seem to be ignorant of this fact. One should consider that if 100% of the incomes of all Americans earning over $250k were confiscated by Obama and Company, it would still not be enough to erase our 2010 – 2011 Federal deficit of $1.65 Trillion. In fact, it would take 134% of the incomes of those in the top tax rate to bring $1 Trillion Dollars into the Treasury,(1) still leaving us with a $650 Billion deficit. The tax burden of the top 1% of taxpayers now exceeds that paid by the bottom 95%.(2) Enlightening?
Oh, and by the way, 75% of all the jobs in America come from small business. A small business is defined as those with up to 250 employees. Three quarters, folks. 3 out of 4. Does raping the earnings of the creators and maintainers of these jobs make a little less sense now?
Bill Gates did not become a multi-billionaire by taking those billions from others. He became rich by creating something others want and are willing to pay for. Steve Jobs did the very same thing. He created wealth by creating value. And in the process he created jobs (Jobs creates jobs, get it?). Thousands of them. Don't want an iPad? Don't buy one. The guy who invented microchips got rich, and as a result, many, many tens of thousands of others did the same using that basic technology to create a myriad of other products and services. And our lives were improved in the process. And newly-created taxes gushed into the Treasury as a result. They still do. Snoop Doggy Doo earns millions by making a fool of himself. But he does not earn those millions off the labor of others. He makes it by uttering unintelligible (c)rap. When he makes money others don't lose it. So should Gates and Jobs and Doggy Doo pay more taxes even though they're already bearing the lion's share of all taxes paid? Obama says an emphatic "Yes." And those in his little downstream redistribution club agree with him.
Should Obama be successful in raising taxes on the highest income earners in our country, I predict that no additional revenue will be raised. In fact, less money should be coming over the transom than is presently being collected. Why, Mr. Chuckmeister, you might ask? The top earners among us didn't get that way by being stupid. Tax them too much and they'll do exactly the same thing they did while Jimmuh Carter was screwing up America. They'll involve themselves in tax avoidance schemes to minimize the tax bite. They'll invest in pieces of Jojoba bean farms, unreleased Willie Nelson records, wind and solar generation plants, art investment/depreciation programs and sale/leasebacks of government buildings, etc. Or they'll engage in bartering, trading something they have or make for something else they need or want, taking that transaction off the IRS radar. It worked then and, with the help of some able accountants, it'll work again. The Bottom Line is, lower tax rates and increase tax revenues. Reagan and Bush's 1 and 2 proved it. I hope the next president is smart enough to prove it again. And hopefully, soon.
I say Obama's position on this issue proves one thing for sure: Having an Occidental and Columbia and Harvard education and having worked hard for several weeks as a Community Organizer for A.C.O.R.N. signing up folks to vote Democrat does not make one a qualified economist. In fact, I believe it proves that this fellow doesn't even know what he doesn't know. But he has been given the keys to our lives and our Treasury by a bare majority of our citizenry. They will all feel better if some extra taxation is extracted from the productive in our society, just because the "rich" can afford it. And they want it. And they're going to get it. And just because they seem to believe that these folks got "rich" by luck or thievery rather than hard work and the willingness to take risks. Keep it up, all you lefties, and watch as those who are growing weary of being picked clean by our society's Professional Leaches vote with their feet and take their money and their jobs (no, not Steve) to Costa Rica, the Panama Canal or the Cayman Islands, leaving no one here in Astlan to create jobs and pay the bills but sign twirlers and Starbucks' Baristas.
Somebody ought to tell Obama that he's making a bigger fool of himself than Doggy Doo. Given that he's surrounded himself with ideologues even less qualified than he is, if that's at all possible, I somehow doubt that's going to happen any time soon.
Oh, and by the way, yes, the Chuckmeister is a graduate economist.
- Calculations compiled by the Heritage Foundation from data provided by the White House Office of Management and Budget.
- Interal Revenue Service, 2008