from guest blogger- Gary Meyers
There is so much wrong about Liberals, but the thing they mostly get wrong is their misunderstanding of the relationship between tax revenues and tax rates. Throughout history, nearly every income tax rate cut resulted in more tax revenues, while nearly every tax rate hike resulted in less tax revenues. Obama knows this, as it has been repeatedly pointed out to him even in live TV interviews. One time, without a teleprompter, his response revealed his true intentions. He doesn’t see raising taxes as a source of the phony $700 billion he often claims will result, but a chance to “restore fairness”, as he sees fit. In other words, Obama so hates successful people that he feels they should be punished for their success and the government should spread their wealth to those who might be more likely to vote for Liberals.
Every other President in the past 100 years knows the truth about taxes. When tax laws are changed, people change their behavior. The mortgage interest deduction was designed to spur housing demand. Tobacco taxes deter smoking. Gasoline taxes encourage conservation. Luxury taxes on cars and yachts reduced their demand (and ooops, put people out of work). The recent Obama-care included special taxes on tanning salons, as an attempt to reduce skin related medical costs. In other words, whenever Liberals state that raising taxes on “millionaires and billionaires” will simply result in more tax revenues to the government, it is knowingly disingenuous and ignores the upcoming behavior changes. In reality, it is simply class warfare and a desire by Liberal politicians to pander to the masses.
In the current debate, Liberals often repeat the slogan that extending the top “tax cuts for the rich” is a “billionaire bailout”. The top tax rates start at $200k/year. Why is earning $199k/year ok, but $200k is deserving of being punished with higher taxes? When was the last time someone earning $200k/year considered themselves a “billionaire”?
Bush’s tax cuts did NOT favor the “rich”. They rewarded all taxpayers who were seeking a retain the value of their hard work. Lower income workers received the greatest percentage benefit from the 2001 and 2003 tax breaks. The numbers are very clear; the highest bracket taxpayers soon were paying a higher total tax burden.
Is this “fairness”? Since the government claims it wants to see more people prosper, and since it knows that higher taxation deters certain behaviors, then shouldn’t taxes be only raised on poor people to deter poverty?
And why does the press allow the continuous claim that raising the highest bracket to pre-Bush levels would raise $700 billion? That fictitious $700 billion is a ten year estimate which assumes that no taxpayer will change their earnings or behavior for the next ten years. Those assumptions have never been correct. This administration cannot even predict taxpayer behavior for the next quarter, yet they seem sure that they “cannot afford” the $700 billion ten year “cost” of extending current tax rates.
And notice the use of the word “cost”, as if taxpayers are actually inflicting a cost upon the government. Liberal politicians believe that all of America’s earned money belongs to them. Allowing you to keep your own earnings is perceived as a cost that the government will struggle to bear. How ridiculously backward.