Posted on 06/26/2011 6:56:51 AM PDT by OwenKellogg
Economic Slavery: Modern-Day Indentured Servitude By Frank Ryan
The "tax the rich" hysteria gripping this nation is absolute insanity. Cries to raise taxes on those with incomes over $250,000 or some other magical number are unbelievable.
As a CPA, I find the "tax the rich" schemes to be pure junk science. To that end, the illogical precepts underpinning these arguments must be exposed. (Incidentally, by way of full disclosure, I would not be personally affected by these tax increases. I merely want to expose the scheme for the fraud that it is.)
Many in Congress have attempted to make earning an income distasteful, so those pitiable enough to earn an income are subjected to public scorn. Politicians and many in the media are collectively pushing policies to "punish those people" by taxing them into economic slavery and involuntary servitude.
The scheme perpetuated by those demanding higher taxes goes something like this:
The wealth gap has widened since the "Bush" tax credits. So raise the taxes on the wealthiest in the nation. The higher taxes will pay down the nation's deficit. Money can then be redistributed to those in need. These reasons are pure fiction!
To start, it is inaccurate to equate wealth with income. The super-rich (billionaires) contribute significantly to political candidates who then perpetuate this myth. By deflecting taxes from the super-wealthy, the super-rich are supporting candidates who favor taxing income and not assets.
Myth 1: Income is not wealth. Assets are wealth.
In the Berkshire Hathaway Annual report for 2010, the company indicated that its average returns from 1965 to 2010 were over 20%. In Buffett's letter to the Bill and Melinda Gates Foundation, he qualifies his gift of stock of Berkshire Hathaway with the condition that "BMG (or any intermediary) must continue satisfying legal requirements qualifying my gifts as charitable and not subject to gift or other taxes." The tax deduction Buffett receives against ordinary income on the contribution of stock which has appreciated and for which he has not paid capital gains taxes virtually translates to a tax subsidy by other taxpayers to Buffett himself. Buffett has, through wise tax counsel, been able to reduce his taxes while at the same time recommending that you pay more!
The perception that higher taxes will pay down the deficit is sheer madness. The "super-rich," as the press likes to call those who work, could pay their entire incomes to the federal government and barely make a dent in the deficit. The top-10% income earners already pay 90% of the tax liability. Involuntary servitude, perhaps?
If we applied the same "hatred" of the "rich" to a protected class of citizen, we would call it a hate crime.
Myth 2: Tax increases will not affect tax receipts. Taxes are a cost to a taxpayer. Increasing taxes reduces disposable income and consumer spending, which results in fewer jobs and higher unemployment. If you do not believe me, ask the Treasurer of the State of Illinois, which recently raised taxes 66% and is now feeling the reduced income for its misguided policies.
The "redistribution to those in need" philosophy merely encourages those on the income-earning side to migrate to the unemployment line. Kill the incentive to work, and you kill an economy. In economic warfare, the objective is to debase the opponent's ability to wage war. Today, politicians favoring such tax tactics are committing economic suicide with their reckless spending programs.
Myth 3: Income redistribution works. See the history of the Soviet Union for more details. Need I say more?
Granted, the wealth gap has increased throughout the world, but blaming this on the tax code can be attributed only to nothing short of intellectual bias. Congress has spent decades trying to make you dependent to help its members get reelected. Wealth gaps are created for a multitude of reasons, with creation of social programs to "protect the poor" being one of the main culprits.
Myth 4: The tax code is not progressive. This is pure fiction as well. The Brookings Institute analysis and the IRS both confirm that higher earners pay up to 30% of their incomes in taxes, whereas lower-income citizens pay significantly less and, in most cases, zero.
Until the American people demand accountability from our government and rational analysis of proposed laws, we will continue to suffer economically. We will fail to address the real issues of our day with real solutions. We will, in effect, reinstitute involuntary servitude on our children and grandchildren, as they have to pay for our fiscal irresponsibility.
The solution is simple. Stop spending.
Frank Ryan, CPA specializes in corporate restructuring and lectures on ethics for the state CPA societies. He is on numerous boards of publicly traded and non-profit organizations.
Well said!
“Kill the incentive to work, and you kill an economy. In economic warfare, the objective is to debase the opponent’s ability to wage war. Today, politicians favoring such tax tactics are committing economic suicide with their reckless spending programs.”
Can this economic suicide be an accident?
Or can we say that Pelosi, Reid, and Obama are the economic equivalent of Doctor Kavorkian?
The terrible shame of it is that a large part of the electorate loves the class warfare routine and will
re-elect Democrats/Progressives/Communists forever.
(How can one country have so many scu&bags in it?)
IMHO
Good luck with that. Most of those swallowing the "tax the rich" meme are incapable of, or outright reject, any kind of logical thought.
“I can’t afford rent and food! Please raise taxes on my landlord and my grocer, and give me more welfare...
Oh , also I can’t get a job- raise taxes on all the employers too to help me!”
People may change but mankind never does.
“The terrible shame of it is that a large part of the electorate loves the class warfare routine and will
re-elect Democrats/Progressives/Communists forever.”
I don’t believe it. The only ones playing class warfare and “tax the rich” are the socialists on the left who don’t want to compete, the Democratic party, the media, the race pimps, and the unions.
In other words, the usual suspects. The rest of us are going for it and want what success brings in a capitalist society and are willing to work (and save) for it.
Most of those swallowing the “tax the rich” meme are incapable of, or outright reject, any kind of logical thought.
And most of the politicians pushing those memes know that. That they willingly pit those non-thinkers against the thinkers and producers is economic warfare.
But what is their purpose? How can it be exposed and defeated?
Ha! Actually both of them had the trappings of success handed to them through Affirmative Action grants and programs without any real effort.
How else do such incompetent usurpers occupy the White House.
sfl
The comments following point to the lack of a future for this country. Virtually every post is dripping with Marxian class envy, straw man fallacy, ignorance, and above all, bitterness.
And every year the government schools disgorge millions more that think like this. Complete hive-thinking commies.
On another thread, I have posted a list of questions proposed by James R. Evans several years ago whereby citizens can make a rational judgment of legislation and/or ideas and their consistency with the principles of liberty underlying our Constitution. They are:
"1. Does this legislation or idea increase, or decrease, individual freedom and creativity?
"2. Does this legislation or idea increase, or decrease, the power of some citizens over other citizens?
"3. Does this legislation or idea recognize that the persons who will exercise the power are themselves imperfect human beings?
"4. Does this legislation or idea recognize that government is incapable of creating wealth?
"5. Does this legislation or idea authorize taking from some what belongs to them, and giving it to others to whom it does not belong?
If 'thou shalt not steal' is a valid commandment, can we assume that it is meant to apply only to individuals and not to government (which is made up of individuals), even if those persons in power pass laws which sanction such redistribution of the wealth of others?'
"6. Does this legislation or idea encourage, or discourage, the very highest level of morality and responsibility from the individual?
. . .when government makes actions 'legal' by some citizens at the expense of other citizens, the result may be behavior which would not be considered possible by individuals acting alone.
"7. Does this legislation or idea propose that the 'government' do something which the individual cannot do without committing a crime?"**
**7 principles drawn from James R. Evans book, "America's Choice," and reprinted in a Stedman Corporation (Asheboro, NC) booklet entitled "I'm Only One, What Can I Do?"
But what is their purpose? How can it be exposed and defeated?
Their purpose, of course, is power. Controlling every aspect of every person's life is the ultimate in power.
Many years ago, on another forum, someone posted an article about a study that showed that women tend to vote based on emotion, men on logic. Of the many (sometimes hysterical) replies on that thread, the one that stuck out the most was someone asking, "And what is wrong with basing votes on emotion?"
I almost cried for that poor woman. The problem with voting based on emotion is that any shrewd thinking politician can play emotions like a fine violin, and their target audience isn't even aware of how much it is being manipulated. That woman probably voted for Clinton, probably never even saw through his veneer to the emotionless manipulative scam artist underneath.
If you destroy the morality of a people, than it becomes much easier to convince them that it’s just fine to steal money from some people who are working to give that money to other people who aren’t working (libertarians please take note). Oh, those pesky morals.
The solution is simple. Stop spending.
DEFUND all socialist collectives, foreign and domestic.
Make legislatures (state and federal) part-time with 1/10th pay, NO benefits, NO retirement, NO perks.
We can live as very low-taxed, productive citizens in a country which acts as a beacon for individual liberty.
The poor, and the dependent upon government, and the number of government workers, and the number workers in unionized jobs, when all put together, outnumber the hard working tax payers who are the real contributors to the economy and to society.
So, there is an inevitable fact in current society, and that is that, when the hard working contributors are outnumbered, they can’t effect the change in government that would stop the madness of people becoming so dependent upon government handouts, and they also can’t overcome government policies which favor those that gain favor from that same government.
The worst inevitability is that, with so many people needing and wanting big government, the final outcome is a dead economy which won’t be able to take care of those “dependents”, and then, the dependents will look again to a “different” government that will “rescue” them from the depression which will have resulted. Even the productive members of society will have lost their jobs and businesses. The path we’ve been in is unsustainable, and it may already be too late to rescue the economy and the country.
The only rescue plan for an economy is to write it into law that, nobody will ever be dependent upon government handouts or government programs or government work. Also, government influence in the economy will have to be completely undone, because, corruption of government officials and government workers usually comes as the result of favoritism and lobbying. Government work should be temporary and not career positions, just like being a member of congress was meant to be.
Our society and economy and country as a whole, started going downhill when we started reinterpreting and messing with the constitution. Big government leads to the inevitable destruction of the country. Like the author of the piece above said, “ask the Russians”.
The inclusion of envy in the seven deadly sins is very, very appropriate. Actually, sloth, envy, and gluttony appear to be widespread in our society. Ironically, we only hear about ‘greed’, when it's being used by the envious to characterize those who were successful by not being slothful.
I try very hard not to be judgmental, and I have many, many faults of my own that require my attention. That said, I really do believe that hateful class warfare and envy are sinking our country.
“Myth 1: Income is not wealth. Assets are wealth.”
Understanding the importance of this is Key to the whole article.
By re-defining yearly income as “wealth”, the proponent of the progressive income tax simultaneously protects his rich patrons from the competition, those new producers who are trying to build their own assets, assets whose use could challenge the power of those who have already built (or inherited) their own wealth. This is so basic, and obvious, I am always astounded how easily these con-artists who try to redefine as “wealthy” as a family who is finally able to generate 250K in a single 12-month period, slip this one by.
Excellent set of questions.
But as another poster points out, we have a hard time getting the average voter to lay aside their emotions in order to engage in rational analysis.
If that average voter was always a taxpayer, then we may see a different outcome. But when the average voter is not a taxpayer (income tax, specifically) then the average voter is voting from a position of greed and envy — the politician can then control the debate.
I almost cried for that poor woman.
It makes you want to cry for the Founders, the military men and women who fought to protect our ideals, and the great hope of mankind embedded in our Constitution and Declaration of Independence.
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