Posted on 08/02/2004 9:07:11 PM PDT by Libloather
The Problem With Bashing The Rich
August 2, 2004
The clear implication of the Democrats' message is that the rest of us would somehow be better off if the rich were worse off ... they've already received their wish. Why are they still complaining?
(National Review Online) This column from National Review Online was written by Bruce Bartlett.
A key theme of the Kerry- Edwards campaign is "us-versus-them," where "us" includes the poor and middle class and "them" indicates the greedy rich. Edwards famously characterized this dichotomy as "two Americas" during his run for the Democratic nomination. The clear implication of the Democrats' message is that the rest of us would somehow be better off if the rich were worse off. Yet according to a July 29 New York Times report, they've already received their wish. Why are they still complaining?
According to the report, the wealthy were decimated by the stock market collapse that began in 2000. This group suffered the greatest income loss of any income group. Every income class above $200,000 — the top 2 percent that Kerry and Edwards say must pay more taxes — suffered an income loss between the years 2000 and 2002 (in inflation-adjusted terms). The losses ranged from 10.5 percent for those with incomes between $200,000 and $500,000, to an amazing 63.4 percent for those with incomes above $10 million.
One out of every eight persons with an income above $200,000 in 2000 had an income below that by 2002. The ranks of those with incomes above $10 million fell by more than half, with the aggregate income of this group falling from $300 billion to $110 billion.
This does not mean we should cry for those rich people whose incomes have fallen. No doubt, the vast bulk of these earners are still doing very well compared with most Americans. But there is reason to question why they should be heaped with scorn by the Democratic party and punished with higher taxes when they have just suffered staggering income losses.
Interestingly, the data show that the bulk of the middle class did fairly well between 2000 and 2002. Despite the recession and higher unemployment, every income class between $25,000 and $200,000 saw an income gain. Those with incomes below $25,000 saw a small income loss of 1.4 percent, which was probably compensated in large part by the 2001 tax rebate and increase in the child tax credit. (The data are for before tax income and thus exclude the effect of tax cuts.)
Kerry and Edwards would have us believe that the federal budget deficit is largely due to tax cuts for the rich. But the article refutes this idea, noting that those tax cuts mainly affecting the rich didn't take effect until 2003. Says the Times, "Falling incomes, rather than tax cuts, appear to count for the greatest share of the decline in income taxes paid. That is because the higher one stood on the income ladder the greater the impact was likely to be from the stock market crunch."
This raises an important point about steeply progressive income-tax rates, which are so strongly supported by liberals. For every $1 increase in income by the wealthy, the government gets about 35 cents. So when the wealthy do well, so does the government. That is why the share of total income taxes paid by the top 2 percent of taxpayers — those targeted by Kerry and Edwards — was 41.3 percent in 2001, according to the Internal Revenue Service, though their share of total income was 22.4 percent.
But this means that the converse is also true. When aggregate incomes fall, the earnings of the wealthy are going to fall the most, meaning that federal tax revenues are going to fall much more. Even in taxation, it's live by the sword and die by the sword. For this reason, many economists favor a flat-rate consumption tax to smooth tax collections. Since consumption varies less than income over the business cycle, government revenues would be far more stable from year to year, rather than skyrocketing up when times are good and collapsing when times are bad.
Kerry and Edwards seldom ever explain that their plan to raise taxes on the top 2 percent of taxpayers means higher taxes for those making $200,000 per year, a good income to be sure, but one that few Americans likely would classify as "rich." With overtime, many cops and firemen make close to $100,000 per year. If they have a working spouse, they are probably in the top 5 percent and within shouting distance of being in the top 2 percent. And even if they themselves never get to that income level, they hope that their children will.
The basic problem with scapegoating the rich for every problem in society, as Kerry and Edwards do, is that far more people identify with the rich than they imagine. Sophisticated liberals know this. As Bob Kuttner, editor of the left-wing American Prospect magazine, recently wrote in the Boston Globe, "Because nearly everyone identifies upward, you don't gain traction in American progressive politics by baiting the rich."
Kerry and Edwards don't seem to get this message.
Bruce Bartlett is senior fellow for the National Center for Policy Analysis.
Funny, I don't feel rich. Unlike others that married some rich loony broad that got her cash because her first husbands plane did not come with air bags I've been working for my money. And the governments take a big chunk of it.
We need a flat tax and fire the IRS. Mainly to stop the politicians from using the current tax system to play George Orwell.
I would actually rather see Social Security Reform than Income tax cuts. Being able to invest my social security money would be a huge boost. School vouchers would be also.
And while we are at it let's have Congress meet every two years for 6 months. Then they go home. They are not needed in Washington all the time anyway. John Kerry has proved that.
Ask someone in Boston or NYC or SF if they are rich at that income. With all the taxes they pay and then the Kerry tax.
They will be on food stamps. Also ask how much taxes the Kerry's avoid paying with loop holes.
If you play around long enough with a democrat, you'll learn that pretty much not living paycheck to paycheck means your rich.
In the late 70's when we had inflation which was causing bracket creep, and there were people getting taxed as "rich" yet were losing more and more disposable income, the democrats were against giving them relief. Reagan had to slam them with his ratings and his mandate.
Today we are tossing $200,000 a year as "the rich". If Kerry is president, in 4 years, the rich will be $30,000. Then again, in NYC, and alot of other places $200,000 for a married couple with kids, isn't exactley living the lifestyle of being rich.
That's what our communistic progressive tax system is all about. The government can set the rich standard at whatever level they want. Abolish the IRS and institute a national sales tax or flat tax.
Tax the rich to feed the poor till they ain't poor no more.
Somewhere the words changed to
Tax the rich to feed the poor till they ain't rich no more.
It is a standard principle of economics that taxing something will cause less of it to exist, while subsidizing something will cause more of it to exist.
Taxing the rich to subsidize the poor thus reduces the number of rich people while increasing the number of poor people.
Actually, the song you refer to says:
Tax the rich,
Feed the poor,
'til there are no
RICH no more.
In other words, even (or especially) back then, the goal was the destruction of wealth and the lowering of living standards for all.
When opportunity and wealth are eliminated, the socialists will have reached their goal. Then we will ALL be serfs, but for those who have political sway.
We're closer than you think to that day. I fear for our youth.
"ten years after"?
America, do you really want your boss to be the declared enemy of the government?
Getting rid of social security and income taxes is the only solution. Bring on the fair tax.
Get the government out of my face - they can currently tell me what kind of SHIRTS I have to buy in order to get a biz deduction!! SHIRTS!!!
"We need a flat tax and fire the IRS. Mainly to stop the politicians from using the current tax system to play George Orwell."
Truer words have never been spoken. Soon as the rats get more the 50% of the citizens not paying any income tax as a result of their redistribution schemes, we will neve see another Republican president. Liberalism will run amock. Next stop, tyranny.
All I can say is - we all have guns, most liberals don't.
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