Killing the Golden Goose
The Ineffective and Immoral Tax Policy of the Left
I was talking with a friend of mine today, a good guy, and a smart guy. But a guy who, nevertheless, has fallen for the liberal line that all of our fiscal problems could be solved if we just raised taxes on the rich. In short, he has taken to the "Fat Cat" theory of macroeconomics. If we can just get the rich; the millionaires, the billionaires, the oil company executive, etc... to pay their "fair share," we could balance the budget, pay down the debt, fund entitlements until Kingdom come, and maybe even help me grow back the hair I’ve lost! The exchange with my friend made me wonder, how many other smart, good people are being sucked into the Left’s class demagoguery in these rough economic times? How many people look at the unemployment numbers, see their neighbors scraping by on food stamps and assume that the best answer is simple income redistribution?
It’s easy to want "them" to pay more, especially if that means that we don't have to! But, the idea of making the rich pay more taxes simply because they are rich is both economically unsustainable and morally indefensible. The top 25% of income earners already pay nearly 90% of all the tax revenue the federal government takes in. The top 1% pays nearly 40% by themselves! How much more can we really expect them to pay before it begins to hurt the economy? If they can't keep their money to invest back into their own business or into other businesses, how many more people will that put out of work? How much longer will that extend the recession?
And what do we do with the extra money you want to take from them? Throw it down the bureaucratic black hole that is Washington, DC where it is more likely to be spent on some senator's pet project than it is on anything that might actually help the nation. The rich are the one's who create the jobs where the rest of us work. They pay our wages; they pay for our insurance and match our 401k. Take money away from them and you will eventually have it taken away from you. Not to mention, the Laffer Curve has been born out many times. The higher the tax rate, the lower the revenue the government actually collects because the rich either shelter their money or the higher rates result in an economic slowdown where the rich have less money to tax.
Secondly, how can we morally defend the idea that we should take money away from someone that they have earned just because we think they have too much? How would you like it if you had nearly a third of your income taken away before you ever see it? And that doesn't include all the other money taken out for state taxes, retirement, insurance, etc... AND the capital gains tax... And the only justification for taking all that from you is that someone thinks that you have "too much". If someone has honestly earned their money, why should they not be able to keep it, be they rich, middle class, or poor? Well, you say, we need their money to take care of the less fortunate in society? There are a lot of private charities and churches that do that and do it better than the government, that the rich already give to and would probably give more to if they were allowed to keep more of their money. It is deductible, after all! Well, you say, we need the extra revenue to cover the deficit and pay down the debt and cover all those entitlements! No, we just need to spend less. If history teaches us anything it’s that, the more money the government takes in, the more they spend. Again, with Washington, DC being the bureaucratic black hole that it is, why would we think that simply throwing more money into the hole is going to fix anything?
Raise taxes on the rich, you say? Bah humbug, I say! Cut their taxes! Let them keep more of what they earn. Let them invest and move their money around without being double taxed at every move. Let them grow their businesses; create jobs and more wealth for themselves and others. In short, let them do all the productive good that the government cannot and should not do. After all, if God only asks for 10% why should Uncle Sam get any more than that?