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Fiscal Policy: A senior White House adviser says no to tax cuts for the "wealthy" but yes for the middle class. Since no one ever got hired by a poor person, who does he expect to give them jobs?
The lame-duck session began with the administration continuing to divide Americans by class. On Sunday, senior White House adviser David Axelrod said on NBC's "Meet the Press" that, despite speculation and hints to the contrary, "there's no bend on permanent extension of tax cuts for the wealthiest Americans."
"The president still believes we have to move forward with these tax cuts for the middle class," Axelrod said. "But we can't afford to borrow another $700 billion for tax cuts for millionaires and billionaires." Axelrod forgets one thing: Letting people keep what they earn is not giving them anything; it's their money.
The Obama administration's problem is it's so focused on the distribution of the golden eggs, it's neglected the health of the goose. Wealth is to be redistributed, not created, and the effects of taxation on human behavior are to be ignored. And for that wealth to be created, reward for risk and long-term certainty are necessary.
The more you let a person or business keep of the fruits of their labor, the more they will labor. The greater the chance of profit, the likelier investors and entrepreneurs will take risks. But if you let the top tax rate rise to nearly 40%, a burden exceeding that of medieval serfs, the economic wheels fall off.
It's a myth that the Bush tax cuts cost us jobs and revenues and led to the current crisis. As Julie Borowski of Freedom Works points out, citing Treasury Department data, the Bush-era tax cuts increased production and innovation, which led to the rich paying a larger share of taxes.
Borowski says that if the Bush tax rates are extended, the top 1% of income earners will pay 37% of taxes with the current 35% marginal tax rate. Under Obama's proposal, these individuals will pay only 31% of taxes with the proposed 39.6% marginal tax rate.
So Axelrod and Obama have it exactly backward. Their plan would result in the rich paying a lesser percentage of total taxes. The way to soak the rich is to lower their tax rates. The way to expand revenues is to expand the tax base, not rates.
It's been said that if you control the language, you control the debate. The debate has been whether the Bush tax cuts should be extended for the "wealthy" or just the middle class or a combination of the two.
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Posted By: dwdrury(3000) on 11/15/2010 | 10:50 PM ET
Anyone bother to actually listen to Axelrod, or BO Plenty for that matter? First they talk about incomes over $250K, then in the next breath they equate that to "millionaires and billionaires". But the two are not necessarily the same set of people. Once again the Dim-o-crats have confused wealth with income. Why $250K? Why not $350K. Or $150K? The number chosen is arbitrary, and thus this regime are just a bunch of demagogues.
Posted By: niteski(1575) on 11/15/2010 | 10:16 PM ET
Rather than paying taxes, my clients reinvest in equipment that can depreciate. Their employees get more productive, but if too much product is made, where are the cuts made? Not the equipment, but the employees. If the taxes go down, then they still get a better return, carrying those valuable employees. The Government revenues continue as well. Go figure.
Posted By: kazooobjectivist(80) on 11/15/2010 | 8:36 PM ET
The government minions forget that taxes are a taking of money we "little" people have earned by the sweat of our brow. And they always seem alarmed that we rebel at the thought of handing over our hard earned money to the likes of Washington political goons whose only purpose in life is to take from some to give to others and in between hope to sifon off some of the spoils for themselves. Look at Charlie Rangel and Barney Frank..
Posted By: MrPeabody(105) on 11/15/2010 | 7:13 PM ET
If you want more employees, you need more employers. It's that simple.
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