Raising Taxes Is No Way to Spur Economy
Monday September 20th, 2010 • Posted by William Shughart at 9:05pm PDT • 5 Comments
It’s September, and election season is under way. Marching to the tune of President Obama’s class-based political rhetoric, some candidates for Congress are campaigning on promises to raise taxes significantly on electorally safe targets.
This year’s list of victims includes “the rich,” Wall Street and America’s oil companies.
Those three groups are in Washington’s cross hairs because politicians need ways to generate more revenue—without spoiling their chances at the polls—to pay for the spending spree they have been on since at least the administration of George W. Bush.
According to the Congressional Budget Office, baseline federal outlays have risen by $4.4 trillion (yes, trillion!) in just the past 31 months.
Demonizing Wealth
The rich and Wall Street are both easy targets. Wealth sparks images of Hollywood and corporate excess. Paris Hilton and Bernie Madoff, like Marie Antoinette, would probably advise us to eat cake. In contrast, most Americans cheer genuine economic achievement.
Individual tales of riches based on hard work and innovation rarely make headlines, however.
So when we hear that Washington is considering allowing the Bush-era tax cuts to expire at year-end, raising the burden on households earning more than $250,000, many think: “Why not?”
But the evidence shows that the top 5% of earners now contribute over 50% of the total income taxes collected by the IRS.
Households reporting incomes exceeding $1 million also contribute more than half of all the money donated to charitable organizations.
Moreover, those same rich Americans often start or run the companies that fuel economic growth. We love a good “Horatio Alger” story—individuals willing to take risks, start new businesses, create employment opportunities and reap profits if they succeed. The process is admired, but Washington now wants to punish the results.
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mohd mahboob says:
Hi, I am Indian. If any Indian will come for Ph.D for research, he has to earn some money for research. So he has to pay tax to USA.
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Even if we would eliminate ALL federal spending for a period of years, we would have a hard time balancing the budget. This is impossible, because the government has huge contractual obligations (which itself created) to pensioners and retirees. But, if you would cancel all contractual agreements with all pensioners and retirees in hopes of balancing the budget, millions of people would starve (unless they get their ass back to work) and a huge revolt would begin. So, we are in a catch 22. Economic catastrophe is INEVITABLE, not a maybe. And a few years ago people would think you’re weird if you are a predictor of doom.
There used to be a guy years ago at the Indiana University campus, who stood at a crowded corner where students pass, and wave his bible and talk about financial Armageddon. Students would poke fun at him, and continue on, laughing. I can’t help but shake my head and realize, thirty years later, he was right.
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Why would anyone strive to become a millionaire knowing the government will try to take a good portion of it from you?? You are talking about stifling workers and thinkers to pay for their Overspending and stupid moves to get re elected because they got some stupid budget item tacked on to a bill to get money for someone who can swing votes for them !! Why work so hard to get reelected?? To give them more time to get more money from their investments, they are not there to serve the people and the sooner you realize this the sooner you can start thing and voting with a clear mind!!!
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vince wike says:
Fact....Absolute fact, the talk of tax increases on the wealthy is meant only,only only to buy votes from the people who need more money. This is a trick the Dems have used since before I was born. If you take the time to do the research you would learn that the increase Obama is talking about would make no difference at all to our economy. Unless you are talking about the governments own economy. It only amounts to a minuscule number of dollars that the government would just blow on more crap we cant use and the deficit continues to skyrocket . If up the number on taxes on the richest Americans to 70 percent you and I would never notice the difference because that would still not fix the debt problem that we now have. If we are ever to get even close to out of debt it will be by cutting spending radically and increasing manufacturing in this country. Now if that idea came out of Obama’s mouth coupled with small tax increases on the wealthy I would support it. Until then I will fight to stop this administration any way I can from doing anything at all other than go back home.
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