American Elephants

One of the problems with debating Democrats, whether on a big stage in Danville, KY or at the gym with an obstreperous lefty, is that we’re usually debating apples and oranges.  Whatever the issue is, we define it differently. And that’s a problem.

Take the issue of “taxes and the rich.” Democrats try to create images of the filthy rich whose wealth came from ill-gotten gains, who keep their wealth in Swiss banks or in the Cayman Islands. These are people who do not deserve their wealth, which rightfully would belong to the all-American middle class, who work hard; while the rich loll around in the sun, beside the pool drinking something expensive.

Republicans insist that a big chunk of that category of “the rich” are small businesses whose owners file the taxes of their business—as individuals. Democrats will have none of it.  Small businesses, specifically as defined by President Obama and Joe Biden, are the little mom-and-pop enterprises, like your neighborhood lunch counter, the shoe store, and your plumber. This error in definition is a problem.

The Small Business Association — a government agency — says that small businesses, defined as companies with fewer than 500 workers, employ about half of the workers in the private sector.

The Chamber of Commerce defines small businesses as firms with revenue of $25 million or less.

You see the problem.  But it’s even worse than that. The Democrats struggle mightily to make you think of the top 1%, but when it comes to who they are planning to tax, you need to remember that oft-mentioned “We won’t raise taxes on anyone who makes less than $250,000, or $200,000 in the case of individuals.” That’s a long way from the top 1%. And it includes a huge number of small businesses who file as individuals.

Look again at how small business is defined. According to the Small Business Association, those companies with fewer than 500 workers employ about half of the workers in the private sector. Those companies are the engine of growth in an economy.

Think how a business begins. Somebody has an idea, he gathers funds by mortgaging his house, committing his savings, hitting up all his relatives. He hires a few people, and they all work hard and it turns out that his idea is a good one and he’s good at money management, so the shop grows and he hires more people. It is the small companies who are trying to grow and succeed who hire lots of people, not the big corporations. We’ve featured quite a few of those people who made videos in response to Obama’s “You didn’t build that,” to show that — yes indeed they did build it.

Mr. Biden, last night, echoing Obama’s statements, said something to the effect that we don’t believe in trickle-down growth, we want to grow the middle class out from the middle. That’s paraphrasing, but how the hell do they expect to do that? If past administration policies are an example, they take the “increased taxes” from the rich, and use them as a stimulus, intending, by putting more money in the hands of the middle class to increase demand, which in turn will make businesses grow. Uh huh. And no Republican has ever talked about, nor advocated “trickle down” growth.

The reason I put increased taxes in quotation marks is that the rich have many options, and they don’t have to pay increased taxes. Past history has shown that increasing taxes seldom brings in the increased revenue estimated. And, if they have raised taxes on all the small businesses who file as individuals, those small businesses will be laying off workers because of the increased expenses. They will already be laying off workers because of ObamaCare, and because of increasing regulation.

There isn’t enough revenue from increased taxes on the rich to make any difference with the deficit, and if they spend it on another futile stimulus, it won’t make any. There are all sorts of increased taxes coming as a result of ObamaCare. The need for more revenue will increase, because there is no serious intent on the part of the Obama administration to cut spending in any way. They care, therefore they spend.

President Obama has made clear his contempt for American business. He sees government work, or work for non-profits as a higher calling — as service.  And his entire administration has the smallest percentage in history, only around 6%, of people who have ever worked in the private sector.

Tom Sowell once wrote that “the political left has long had a remarkable lack of interest in how wealth is created.  As far as they are concerned, wealth exists “somehow” and the only interesting question is how to re-distribute it.” Sounds remarkably applicable today.

Seasonally adjusted, the net percentage of owners planning to create new jobs has fallen to four percent. Sales are weak. Fed Ex has announced planned  layoffs. The regulatory burden on small business is estimated by the Small Business Administration to be over $1.75 trillion annually.

There still seems to be some belief left over from the hope and change of four years ago. The president has been remarkably silent about any plans for his second term. His campaign speeches are almost entirely attempts to bash Republicans. Mr. Obama has made clear his contempt for Mitt Romney, which seems to be of a part with his contempt for business in general. He does not understand “growth”nor how it comes about. His goals have included a vast new regulatory burden, and he does not understand how that retards business growth, nor does he understand that since “they have enough money” why they shouldn’t share more of it.

Listen to what he has to say. Do you see any indication of what he would want to accomplish in a second term, how he would pay for it, and how he intends to relieve the burden that government has imposed on the people? And just how do you grow an economy “from the middle out?” There’s no plan, there’s no hope. It’s all just about winning — all politics, all the time.