Wednesday, July 18, 2012

You Guys Didn't Build That

I had posted this cartoon on facebook, and a friend of a friend commented on how fun it was to take quotes completely out of context and run with it.   Well, they would know.  They'd never do that with, say, Sarah Palin and a "task from God" or anything like that.

Time to Stop an Echo.

It's not out of context. Obama didn't say entirely what he meant to say -- which was to paraphrase what that psuedo American Indian woman Elizabeth Warren had said months ago ... but it's the same thing, and it's what he's been peddling all along and still is today.

Yes, government is necessary to protect life, liberty, and property - the three natural rights. And without it setting consistent expectations for the rule of law, success would be limited to plunder. But those rules are the same for everybody, or they should be. No bailouts if you fail, no plundering if you succeed.

Even taking Elizabeth at her word, though, the rich DO pay for the infrastructure out of proportion with the rest of us. When the top 10% of earners pay 70% of the federal taxes ... under what definition of "fair" is it that we vilify them and claim they got there on our backs and that they should pay even more than the more that they're already paying?

No, what would be "fair" would be a flat tax. Everybody pays the same rate. With a flat tax rate, the rich pay more, because they make more. The lie that's being peddled here is that they don't already. They do. They not only pay more, they pay at a higher rate than most of us.

Once you decide that an equal rate isn't "fair", what is "fair" becomes pretty arbitrary. Because the problem isn't revenue, the problem is spending, and the problem is spending because people are willing to spend other people's money in wasteful ways that they wouldn't spend it if it were their own. People want more stuff - they vote for it, and then look for someone else to pay for it. Not only are they disconnected from the spending, they are disconnected with the fact that you get less of what you tax and more of what you subsidize. The more you tax production, the less production you get. The less production you get, the less wealth is generated. The fewer jobs are generated. And the kicker for the government is that the REVENUE ... GOES .... DOWN .... (Which Obama admitted during the 2008 debates, but he basically said he didn't care.  ) so now there's even less government money to help the people who are now out of work. It sows the seeds of our demise.

He even contradicted himself in his own speech. Even though he implicitly acknowledged that you get less revenue, he turned right around and talked about all of the things we need to "invest" in ... which takes money. Which we would have less of under his "fairness" plan.

I know this is a lot more complicated than the frivolous ideology of "Hope", and "Change" -- but nobody said reality isn't complicated.

To which our facebook commented that it was an oversimplification to say that reducing taxes increases revenue.  Sigh.  Fill him in some more.  Not that I'll convince him.  But that's not what stopping echoes is really about.  But ok.  In for a penny, in for a pound:

Sure it's an oversimplification. 0%*$Whatever=$0, so clearly reducing taxes to zero means no revenue. And, of course, I'm sure you'll acknowledge that a tax rate of 100% (something considered not unreasonable by none other than Obama's father) would make a huge, one-time increase in revenue, but then there would be nothing left to tax next year.

Unless somebody produced something. But why would they? It's just going to be taken away.
Which is the basis of the Laffer curve. Everyone agrees there's a curve. Reasonable people can argue over where the "sweet spot" is, but that top rate has been as high as 94% IN THIS COUNTRY (1944). In 1932 it jumped from 25% to 63% (what happened in 1932? Why did the depression last longer than any other recession? What role did the high tax rates sold as the solution play in perpetuating the problem?)

The top tax rate was never below 70% from 1936 to 1980 (What happened in 1980? When people tell you taxes were higher under Reagan than they were under Clinton, what historical context is used? "None" is the answer to that.)

But going to the cut from the debate I included the link to above, in each instance, when the capital gains tax rate was dropped, revenues increased. So apparently 15% isn't too low. And increasing it back to 20% or 28% conversely would move revenue down on the curve. Obama did not disagree with this, then turned around and said we needed to "invest" in things (that cost revenue) and used that to justify raising the capital gains tax rate, because it's "fair". What kind of sense does that make?

Never mind that it's counterproductive. But the purpose of taxes isn't "fairness" -- it's to fund government. And how we do that can be fair, or it can be unfair. And our government was instituted for very specific purposes, not to be an ever-expanding social behemoth. In addition to that, raising rates on one group of people isn't "fair", it's the opposite of "fair". Fair would be "flat" (yes, another oversimplification because I, like my Fair Tax proponent friends, acknowledge that people need a minimum amount to feed and clothe and house themselves -- however, I could still argue against not taxing them at all. If we all know how much we're getting taxed, we will plan accordingly, and so will our employers -- who, after all, are buying our services.)

But otherwise, if "flat" isn't "fair", what *is* fair and who gets to decide that? Nobody in the tax-raising business will *ever* say how much is fair. What's "fair" to them is what they want today, but don't get comfortable, we'll be back tomorrow when we want more.

As to job creators being the "only" economic generators, not even the most serious of the conservative writers on the subject (Hayek, et. al.) argue that. They do argue that the private sector, under free-market conditions, is the most effective economic generator from an efficiency standpoint and from a diversity of product standpoint. More needs and wants are satisfied and more wealth is created under an unplanned, citizen-driven free market system than under government-planned public sector systems. That is shown again and again and again.

And not only is it the most effective, it's also the most moral. Nobody has a right to force another to do something for him. If health care is a right, then someone *must* provide it. Ergo, health care is not a right. Further, if someone *must* provide it, the terms *must* be dictated by a third party. But in a free market system, there are those who need health care and those who provide it, and they agree on the terms between themselves (although the attitude that iinsurance = a prepaid health plan has gotten in the way of this) to the mutual benefit of each ... and no, "benefit" is not always monetary. Charity is a personal thing. Forced charity isn't charity at all. And real charity happens all the time. It used to happen more before the government started on its quest to monopolize it.

And we've gone broke doing it.

No amount of tax-raising on the rich will even put a dent in that. 

Only economic prosperity can pull us out of it. And economic prosperity is NOT driven by the public sector.

1 comment:

Whitehawk said...

"And the kicker for the government is that the REVENUE ... GOES .... DOWN .... (Which Obama admitted during the 2008 debates, but he basically said he didn't care. ) so now there's even less government money to help the people who are now out of work."

The Liberal version of trickle down economics.