Raising taxes on the rich
Let’s not get too taken with the minutiae of the Obama deficit-reduction proposal, which are a bit difficult to discern at this point anyway. This is merely Obama’s latest move in a chess game that will have many more moves and countermoves before it is finished.
It certainly was inevitable that Obama’s deficit-reduction proposal would include raising taxes on “the rich,” however that is defined at the moment. Is this a good idea? This video of Obama from two years ago has gotten a bit of traction; he says that raising taxes in the middle of a recession is not a good idea:
But before we criticize Obama for hypocrisy or changing his mind, reflect on the question of whether we are still technically in the middle of a recession. And reflect on the fact that the tools for fighting a recession are not necessarily the same tools that tackle deficit reduction.
That’s the dilemma as I see it. Democrats and Republicans differ greatly on how to fight both. Democrats lean heavily on the side of more taxes, especially for those shape-shifters “the rich,” and on the notion of income redistribution to make things more “fair.” Republicans believe that “the rich” includes small businesses that cannot be bled too much or they will cease to drive the engine of our economy, and that it only “fair” that people should be allowed to keep their earnings as much as possible.
We can argue till the cows come home on whether higher taxes on the rich will depress the economy. I happen to think it will have a chilling effect on an economy that is already cold enough. But I really have no idea (I’m being honest here) whether we’ve reached that point already, or whether some slight increases would be okay (I also don’t think that couples making $250,000—especially if they run a small business—are particularly rich, although I’ve never seen anywhere near that income in my lifetime.)
What’s more, in my opinion Obama’s proposed cuts in Medicare don’t go quite far enough, despite the fact that any cuts in entitlements feel noxious. But we’re going to have to get used to more of that feeling.
But I’m waiting to see what the gang of 12 is going to come up with. And then, to see who will win the battle. None of this continuing uncertainty can possibly be good for the economy, however.
It’s a bigger battle than taxing and spending. It’s about the limits (if possible) of government and both sides are arguing about whether or not we shall have a larger government or a much larger government. Cuts don’t enter into it in any substantial way.
It is, really, more of Wonderland shadowboxing for the benefit of the groundlings. At the end of the day it is just much of a muchness with barely (and almost literally) not a dime’s worth of difference between the two.
In short, our rulers are setting us up for more taxes and they will be coming from both sides of the table. Like the debt-ceiling “debate” it is merely a question of how much now and how much later. It’s about, if it is about anything, looking good rather than doing good. It will be “Look how much we saved for you” from the Republicans. “It could have been MUCH worse.”
From the Dems it will be “Look how much we got for you. It could have been MUCH less.”
The only wild card in all this is being played from outside from the loose affiliation known collectively as “tea party.”
These are the people who, without any real solid affiliation, can sway the parties. The bottom line here will be if they can concentrate into a meanigful and lasting block who say, with me: “If it gives the government any more power or money, no matter what the reason, I am against it from now until the last ding dong of doom.”
Absent that, mon cher neo, you are just being hypnotized by the kabuki gestures.
Obama’s hypocrisy is amazing. He has increased the deficit by more than all previous President’s combined and now he wants to pay for it by “taxing the rich”, excluding, of course, his cronies. Worse yet, he has saddled the country with an unfunded mandate that will accelerate the rate at which the deficit increases. We are way past the point where increasing taxes can address the problem. All it will do is drive more of our economy off-shore and away from his rapacious appetite for “other people’s money”. The only cure is cutting Government spending back to the historic 19-20% of GDP. Obama can’t do it and won’t do it. The GOP establishment, under the leadership of Boehner and McConnell, won’t do it. That leaves us, the people, to do it, and the only way to do that is to repeat the 2010 experience: primary out the RINOs; attack every Democrat seat with gusto, and ensure we get a GOP candidate who truly represents the Tea Party’s three core principles: Fiscal Responsibility, Constitutionally Limited Government, and Free Markets.
Neoneocon,
Yes we can ARGUE about taxing the rich bu that doesn’t change reality as presented by historical fact as Thomas Sowell recently noted:
http://www.nationalreview.com/articles/277249/you-can-t-tax-rich-thomas-sowell
In my opinion, a lot of Republicans, R.(s) who make up nearly 50% of the voters in The U.S.A., had already used up all of their patience in dealing with Obama, when Obama let the [2011 debt ceiling problem] drag on too long, THEN he blamed the long duration of the problem on the GOP, who did not hold up the solution to the dc problem.
After the dumb squabble that Pres. Obama did with the dcp, he is now blaming all the nation’s finance problems on the GOP and “the rich”. “The rich” being anyone who makes over $60 thousand a year, or maybe he means those “rich people who earn more than minimum wage each year”.
The Republicans and other non-Obama voters, have been [unfairly bullied + demonized] by Obama for close to three years running.
I think, that in his dumb and hideous treatment of the Republicans and their friends, his treatment of these two groups since 2008, Obama has found a way to get 50% of the United States to vote against President Obama in the 2012 Presidential election.
What chess game? All the Republicans have to do is remind people that dems failed to pass large tax increases when they held large majorities in the House and Senate. The public still voted them out. Obama thinks it is going to end differently for him?
The idea of whether the rich are paying their “fair share” ignores the essential point that the government is currently too big. Rather than give the gov’t more money, through higher taxes, we need to focus on ways to reduce the size of all levels of government. For example, some people in San Francisco believe that it is the government’s role to decide whether circumcision should be allowed.
Anyone who expects anything non-harmful from the Supercommittee is daffy. It will take only one Repub to cave, then it’s a done deal, and the GOP is notable for cavers. It is all elitism writ very, very large, and that’s very, very bad for you and me.
As to tax increases, this is not a time to be tweaking with modest, symbolic increases. We do not know what’s in this bill either. Betcha the taxes (excuse me, revenues) will be in the trillions over the next decade.
We are now at the very edge of a disaster. Obama knows this. It is what he wants. The only safe place to be is in Obamacronyland.
Debating whether Obama’s economic tinkering of taxing the rich strategy can be effective is like debating whether throwing a thimble of water on the World Trade Center inferno can be effective.
So many other long-term factors conspiring to bring down our economic ship—getting off the gold standard and the rise of unpegged fiat currency, decades of pathological consumption based on undeserved credit, the magical thinking of printing of unlimited devaluing dollars for unlimited government spending and finally inattention to deficits and debt disorder. All these things have been going on for decades and only getting exponentially worse.
Obama is doing this bandaid tax-the-rich deal because he’s utterly clueless and hopes—no pun intended—to get re-elected. In any and all events, our economy and buying power are becoming blackened toast.
I agree that all this tax talk is avoiding the real issue – the size and scope of government. But I have to say that I am sick of all his talk about people paying their “fair share.” What about the 47% who don’t pay any income taxes? And his comment about this being about math is insulting – we already know that even if the rich were taxed at 100% it would hardly make a dent.
My shorthand rule for the taxes vs. spending cuts debate: if you raise tax rates, you may or may not raise more revenues (though you probably won’t, most of the time). If you cut spending- then you’ve cut spending.
roc scssrs,
Actually, the federal govt’s own numbers show that if you raise tax rates you will NOT raise more revenues. The ratio of income tax revenue to GDP has remained remarkably stable at ~18.8% since the end of WW II, regardless of tax rates.
18.8% (or thereabouts) seems to be the magic number on which the markets balance regardless of govt action.
Obama takes taxes and turns them into poop. (Disclaimer: this message comes from my inner child.)
The economic illiteracy of the progressives is just breathtaking. They cannot seem to understand that the government has no money except that which we the people agree to let them take in taxes. When the taxing exceeds a certain level it reduces the investment that creates the wealth in this country. You cannot increase the wealth with government “investments.” Those are recycled dollars from which an administrative fee has been taken. Most government spending results in no new job creation except government jobs, which are seldom in areas that create wealth.
A nation’s wealth comes from such activities as farming, mining, oil and gas production, manufacturing, new technologies that make people’s lives better, innovative and desired services, etc. The federal government’s necessary activities – defense, justice, and foreign affairs create no wealth – they are services that we want/need. Other activities such as regulation of education, energy, health, transportation, agriculture, banking, markets, etc. may be desired by many but in the hands of heavy-handed bureaucrats have become a drag on wealth creation. Social programs such as support of the Arts, Medicare, Medicaid, Welfare, and Social Security are nothing more than redistribution of the nation’s wealth. The promises made by politicians in those programs have outstripped the ability to pay. That in turn is a drag on new wealth creation because people that might be willing to take risks in new businesses are unwilling to take the risks, which is the case under Obama.
The only solution is to decrease the size and reach of government so that wealth creation can flourish and government becomes a manageable, affordable entity that protects its citizen’s liberties and right to own property. Further, it should try to be as friendly to wealth creation as is possible without actually getting involved. (Crony capitalism.)
Raising taxes will only encourage the spendaholics in Congress to spend more not less. As to the notion of fairness, why is it fair to take money from anyone and give it to someone else? And what is a fair level of taxation? Is there anyone here who thinks their taxes are too low? Should we look at our better paid neighbors and be envious? You cannot make a poor man prosperous by bringing the prosperous man down. What most of us want in this nation is a level (fair) playing field, not equality of income.