Posted on 08/09/2011 8:12:31 AM PDT by SeekAndFind
President Obama has said that he wants to "spread the wealth". He proposes to raise taxes on "the rich" to get more money for "stimulus" spending, such as longer unemployment benefits. Let's look at how this "spread the wealth" thing would actually work.
Joe Lunchbox works in a factory owned by Reginald Bigbucks III, a billionaire. Obama stops at the factory during a "Jobs" bus tour through the Midwest. Joe and his coworkers assemble in the lunchroom to hear Obama speak.
"Good news," the president tells the workers. "We are going to be spreading the wealth. We are raising taxes on millionaires and billionaires-like Reginald Bigbucks III-and we are going to spend the money to benefit the middle class, people like you."
Joe raises his hand. "What do you mean?" he asks. "I mean, like, what is actually going to happen?"
Obama explains, "To pay my new taxes, Mr. Bigbucks is handing this factory over to the federal government. We are going to tear it down and sell it for scrap. Then we are going to use the money to extend unemployment benefits for another 99 weeks."
"Oh," Joe sighs. "Well, then, I guess that I'm going to be needing those unemployment benefits."
If the above example strikes you as fanciful, consider the following. To "tax" is to take away something from someone and give it to the government. "The rich" are rich because they own a lot of assets. So, what it means to "tax the rich" is to take assets away from rich people and transfer them to the government.
So, what are the assets that the rich own? The rich don't have money bins full of cash, like Scrooge McDuck. Rather, they own things like factories, office buildings, and oil wells, either directly, or indirectly via stocks and bonds.
In other words, the rich own most of the "nonresidential fixed assets" of the nation. These assets certainly count as "wealth", but what they are physically are the tools that workers use to produce America's GDP.
The government doesn't want factories, office buildings, or oil wells. It wants cash. So, taxing the rich forces them to liquidate assets. This liquidation is accomplished financially, rather than by actually tearing down factories and selling them for scrap.
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We did. We had unemployment below 5%, which is close to full employment. There is not such things a zero unemployment because there is always a flux companies growing and downsizing. During part of the late 90s and part of the 2000s we were essentially fully employed.
With the tax cuts and the deregulation put into place we should have seen an influx of jobs.
We did.
There are a variety of other variables that affect the economy other than tax rates, but it is proven over and over again that a low tax burden, low regulatory burden, and less government interference produces the most economic growth and a better job market. Our tax rates are still high in this country, by the way. The Bush cuts only took about 3% off the highs during the Clinton years. It was a modest, comprised cut. In some parts of the county, people are paying out over 50% of their earnings to the Federal, state, and local governments.
You owe me $500,000.
I honestly think unless we find a common ground nothing will change.
Do you want to use PayPal or a credit card?
Conservatives always seem to forget that plenty of Joes think this is a good deal, because they hate their jobs and hate Mr. Bigbucks even more. Joes aren't noted for long-term thinking nor any ability to defer gratification.
I teach my kids this very thing - it doesn’t matter how many people say it’s right if God says it’s wrong.
It’s not right for one person to steal from another.
It’s not right for 5 people to vote to steal from another.
And it’s STILL not right if 100 million people vote to steal from another person.
Taxing the rich doesn’t even work. First, they (and to the IRS and Democrats, that includes me) restructure their finances to avoid taxes, which means they allocate their wealth in a manner that is not optimal for themselves or for the country from a business perspective but that cuts their tax bill. When they do that, their workers lose. Second, they don’t see their business rates in terms of pre-tax income. They’re smart enough to do the numbers on the fly and figure their after tax income at any given pay rate. When I set my rate for my services, my goal is to receive a specific after-tax income in return for my time. The individuals and companies that employ me pay that plus whatever it takes to cover my taxes. The grocery store we shop at charges “the little people” more so they can afford the pre-tax charge that their lawyers set to cover their desired after-tax income. The same is true for our doctors and medical insurance, and for the rest of the rich. Venture capitalists know what they have to make to cover taxes plus a profit that balances teh risk, and those who buy new products are paying for the risk plus the tax rate. Taxes get passed on to the general middle-class population - it’s inevitable. The problem is that voters think “the other guy” is paying those taxes, so they aren’t picky about spending that money wisely. The result is that ordinary people pay for extravagant government and then watch that money get wasted.
Will you take it in lead and copper?
Given that there are always “some” people between jobs, full employment is about 4.5% unemployed. It was pretty close to this number during most of Bush’s two terms. That’s damn near “full employment”.
I'm all about compromise. Starting payments to me will move this country forward.
Average unemployment rate for Bush and the GOP Congress was under 5%. Anything less then 5% is considered full employment by Economists since a certain % of people are either unemployable (druggies, mental handicapped etc) or in the process of switching employment. Trickle down has worked every time it been tried. Where it breaks down is that it is eventually abandoned by the DC political class for Progressive political dogmas.
Comparing Bush and the GOP economic record with that of Bush and the post 2006 Democrat Congress proves just how well it works.
The IRS recently published the fact that $235,000 Americans make $1 million or more in income. If you take EVERY penny of that income you can fund the Fed Govt for....about 30 days. And that assumes that if you take all the money, it has no impact on economic growth.
The only way to get out of this debt crises is economic growth coupled with spending cuts. The only way to get real sustained economic growth is to push serious efforts to massively increase domestic energy production
High energy prices are the fundamental drag on the US economy.
Part of the cause of high energy prices is our insane fiscal policies which weaken the dollar but also by the “green” energy dogmas the Obama Democrats have foisted on us the last 3 years.
High Energy prices have an radically negative effect on the economy. High energy prices destroy US Consumer Confidence and they eat up US Consumer’s discretionary spending dollars.
US Consumer spending is the engine that drives the World Economy. Without it any economic recovery will be anemic at best.
US Consumer have seen, in just the last year 40% inflation in the cost of energy. High energy prices effect not only the price of gasoline, but also the price of every good and service the consumer buys. It also drives up the price of the energy the consumer buys to power their homes. It drives up the costs for producers to produce the goods US Consumers buy.
Until the cost of energy is addressed the US, and the world, economic recovery is going to be stagnant at best.
A division of labor society is necessary to live a life proper to a rational being.Two of the institutions necessary for a division of labor society is private property rights and freedom of economic inequality.Egalitarianism and redistributionism is an assault on both private property and freedom of inequality.
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I’ll tell you what...in order to avoid gridlock and make sure my children don’t starve, let’s find a “happy medium”.
You owe me $500,000.
I honestly think unless we find a common ground nothing will change.
Do you want to use PayPal or a credit card?
I think you totally missed my point. How is me paying you $500,000 common ground? That is in no way what I meant by middle ground. I stated that NEITHER idea seems to work when put in place. It is time to come up with a whole new strategy. Just yelling cut spending!! Democrats fault!! Obama sux!! Tea Partys fault, Bush did it!! does nothing but create discourse and gridlock. Neither side is going to come to any agreement in that matter. This isn’t a friggen sporting event we are watching this is our country going into the shitter.
You have added nothing to this conversation other than your ability to be a smartass.
I agree whole heartedly with this. Domestic Energy production is definitely one of the ways we can get on the right path to fixing the economy.
Depends on your definition of “fix”.
To them, “fixing” the economy means converting it to socialism.
Even if we took all the wealth from all the rich it would not equal $1 trillion. The debt congress and Obama just authorized is $2.4 trillion of rjust this year and that grows every year. So how is taxing the rich their $1 trillion, which is a one time tax as they are broke after that, going to pay for the $2+ trillion each and every year?
Hissy Chrissy and the rest of the dingbat liberals can’t do simple math.
It's half way between the $1,000,000 I think you owe me and the $0 that you are willing to pay.
What could be more fair? It's for my children. You don't hate children, do you?
You have added nothing to this conversation other than your ability to be a smartass.
It's just a little exercise in critical thinking for those that want a "happy medium" and "common ground."
Look, I can see that you are irritated. Let's make it an even $300,000 and end this grid lock.
Now, you've saved $700,000 that you can spend elsewhere and I can feed my hungry kids. Win-win. Eh?
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