American Elephants

Tax the Rich, Tax the Rich, Tax the Rich. by The Elephant's Child

The Progressive People’s Budget  from the Progressive Caucus in Congress—76 of the most partisan Democrats in the House, responds directly to Paul Ryan’s “Path to Prosperity”, in just the way you would expect.  They want to increase taxes.

First they want to raise the Social Security tax to cover nearly all of a taxpayer’s income. At present the tax is imposed on the first $106,000 of earnings. The caucus would tax a full 90% of income, no matter how high it goes. They would raise the Social Security Tax that employers pay as well.  Then they would create three new individual brackets for the highest incomes with the top at 47%.  They would raise the capital gains tax, the estate tax, and the corporate tax.  And of course, repeal all the Bush tax cuts.

Spending savings would come in the form of cuts for national defense. They would end “overseas contingency operations” — Afghanistan and Iraq— beginning in 2013.  Then they would “reduce strategic capabilities, conventional forces, procurement, and research & development programs.”  In other words in an increasingly dangerous world they would gut America’s ability to defend itself not only today, but far into the future.

The “People’s Budget” amounts to — a new stimulus plan.  I told you. If it didn’t work, it’s only because they didn’t invest enough money.  Progressives priorities never change. $1.4 trillion for  job creation, early childhood K-12 and special education, quality child care, energy and broadband infrastructure, housing, and research and development  with some roads and trains thrown in.  That will fix everything, won’t it?

We are $14,500,000,000,000 in debt.

This year’s deficit is $1,700,000,000,000.

Obama has already spent $1,000,000,000,000
to stimulate the economy.

We don’t have a revenue problem,
we have a spending problem.

We have tried high tax rates before. It seems as if when you raise taxes, it should bring in lots more revenue.  It seems as if it would do no harm to the economy. It assumes that interest rates would stay the same. From 1951 to 1963, the lowest tax rate was 20% to 22% and the highest ranged from 91%-92%.  The top capital gains tax rate was 39.6%.  Individual income taxes have been a constant percentage of GDP regardless of how high rates on salaries are.

When the tax on capital gains is high, it brings in less revenue. When the tax is low, it brings in more. When the tax is high, people hold on to their gains. When the tax is low, they are more willing to realize their gains. There are always consequences. When you raise taxes on corporations, many pack up and move overseas. The only reliable way, according to economist Alan Reynolds,  to raise real federal revenues over time is to raise real GDP.

Obama’s Budget Speech: Rude, Divisive, Partisan and Toxic. by The Elephant's Child

President Barack Obama spoke at George Washington University yesterday about the budget and deficits.  This was his response to House Budget Chairman Paul Ryan’s budget proposal “the Path to Prosperity.” The President gave a disgraceful and dishonest  campaign speech rather than any serious attempt to address the nation’s problems.

President Obama does not lead.  He is simply not a leader.  He prefers to step back passively until everyone else has put forth their proposals, then react and add his approval, disapproval or alternate proposals. You will see this approach on most major issues.

If you step out front, leading the charge, you are sure to be blamed for mistakes or missteps.  Obama does not intend to be blamed. Even in this speech, 2½ years later, he is still blaming George W. Bush.  Any deficits, national debt are the fault of the Bush Tax Cuts and the Bush Medicare Drug Benefit.  No way is anyone going to blame him for tripling the deficit, for overspending, or wasting public money.

Liberals like to talk about “fairness,” and Obama certainly did.  Liberals talk about “community” and “caring and sharing,” but their talk is all about other people. For themselves, they see a permanent elite of the better-educated or the more-important who will control the lives of ordinary people to improve their lives.  They will regulate your health, your home and the services you use, your education, your food, and all those things will be better because wise people in Washington are deciding what would be more ideal for the community of Americans. Your opinions are not welcome.

Liberals care about their intentions, and they have the mistaken notion that a good intention is a policy. They are really not much interested in evidence, or at least they care only about their own evidence.

FDR, they believe, saved the country with Keynesian economics.  That’s good enough for them, and they are permanently convinced that investing money in the economy has a ‘multiplier effect’ that will create jobs and rescue the economy.  If it doesn’t seem to work well, it is because they didn’t invest enough.  If Head Start is shown in constant studies to fail at its intended purpose, it is because they didn’t invest enough. And so it goes. The top marginal tax rate from 1951 to 1963 was 91%—to 92%, and the country didn’t collapse, so the evidence shows that there’s nothing wrong with raising tax rates on  the rich.

People who know Obama say that he does not change his mind. His ideas are set in concrete, and it’s true. Here is the first step in his proposals:

We’ll make the tough cuts necessary to achieve these savings ($760 billion over 12 years), including programs I care about, but I will not sacrifice the core investments we need to grow and create jobs.  We’ll invest in medical research and clean energy technology.  We’ll invest in new roads and airports and broadband access.  We will invest in education and job training.  We will do what we need to compete and we will win the future.

What is the matter with that?  Government gives grants to those who write good grant proposals. This amounts to all those clever bureaucrats in Washington deciding what medical proposal will actually produce a cure or a successful new drug; what business will be the one that is successful in developing a clean energy technology.  Governments are not capable of this.  Venture capitalists who are investing their own money do far more extensive due diligence studies before they invest that any government does.

We did airports —new runways for airports that only get a plane or two a week.  We did embryonic stem cell research—still a dead end.  We did job training— and the trainees still don’t have jobs, and they trained people for jobs that don’t exist.  In country after country, these are failed programs, yet Liberals don’t learn from that evidence, they just want to invest more money. Their intention is noble, it just won’t work.

That was his first proposal. The second was just as predictable — slash defense spending. “Secretary Gates has courageously taken on wasteful spending, saving $400 billion in current and future spending. ” I believe we can do that again” Secretary Gates has already said no you can’t.

His third step was to “further reduce health care spending in our budget. “Our approach lowers the government’s health care bills by reducing the cost of health care itself.  The reforms we passed in the health care law will reduce our deficit by $1 trillion.” Which is just a blatant lie. And which he followed up with the starving seniors dying in the streets and depriving seniors of nursing home care which are considered demagoguery even out on the campaign trail. As a response to a serious debate in Congress attempting to address the huge budget problems faced by the country without harming anyone, this was so irresponsible it was breathtaking.

And of course he wants to raise taxes “on the rich.” All very predictable, but very, very disappointing.

%d bloggers like this: