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Politics

Tax increases on the “rich” won’t help

repealing-tax-cuts_speding_entitlements
Posted: December 26, 2012 at 5:00 pm   /   by

Polls show that majorities are with Obama and the Democrats: A majority of people think that current tax rates for people making over $250K a year should expire, causing their rates to go up.

This majority is ignorant of some basic facts. Among these are the fact that . . .

  • We already have the most progressive income tax in the world,
  • A smaller number of people at the top of the income scale are bearing a greater burden than ever before,
  • A larger number of people on the lower portions of the income scale are bearing a smaller burden than ever before,
  • Raising taxes on these higher earners will cost the jobs of lower earners,
  • If any net revenue is raised by this measure (and there is reason to be skeptical that any will, given the loss of economic growth that will occur to counterbalance), it will not be spent on deficit reduction. It will be spent on existing or new programs.

Obama and the Democrats have roped people into thinking that the reason they need to money is to reduce our deficit. That is nonsense. They want the money to spend the money. But there’s another basic fact that people are missing:

Even in the rosiest of revenue scenarios, letting these tax rates expire will not produce anything near the revenue needed just to cover current expenses.

We are borrowing 40¢ of every dollar we spend now, just to cover our current unsustainable liabilities. Taxation cannot solve the problem. Anyone who says otherwise is either ignorant of the facts, mathematically challenged, or a liar.