Taxing the Rich
Posted on November 21, 2011So, just exactly how would raising taxes on the rich help the poor?
That is the question that I am trying to noodle in my brain.
President Obama’s proposal to tax the rich would raise about $750 billion over ten years, about $75 billion dollars a year. Our current yearly budget deficit is about $1.3 trillion. Raising taxes on the rich won’t make a dent in our budget deficit.
According to the left-leaning Urban Institute, the top tax rate on the the top two highest income brackets would have to rise to nearly 77% if we wanted to raise enough money to reduce the deficit to 3 percent of economic output. It would have to increase to 91% if the purpose is to reduce the debt to 2 percent of GDP.
So, raising taxes on the so-called rich is not really a serious way to deal with our debt problems.
Perhaps the point of raising taxes is to directly fund more money into more government programs. Maybe that is why Democrats want raise taxes on all of those “rich people.”
There is no evidence that those thousands of different (and conflicting) government programs are actually doing much good at the federal level. In fact, so many of those programs waste so much money, that there is a very good case to make that they are making economic problems even worse.
The Democrats should simplify their approach. They should mandate that rich people just directly give their money to poor people. And then the poor can do whatever they want with the money. Maybe it will help some of them pay the rent or pay for school. Maybe it help others buy a six pack of beer or perhaps a carton of cigarettes.
I am continually amazed to see very wealthy Democrats, people like Nancy Pelosi – a politician who can afford to get her hair “blown out” at Georgetown’s ritzy Four Season hotel every day – complain bitterly about how selfish the rich are.
I don’t know very many really rich people, but the ones I do know seem like nice enough people to me. Some might be greedy bastards. Some might be just lucky stiffs who inherited their wealth. And some might be true innovators who provided a real important product or service to American consumers.
But how does it make me wealthier to tear them down? How does the poor gain the tools needed to make it to the middle class by having politicians (especially wealthy politicians) attack the rich?
Seems to me that our society would be better off if we all paid an appropriate and proportional amount in taxes to pay for an appropriate (and proportional) amount of government, and that give our citizens the maximum amount of freedom to go after their dreams.
Attacking the rich seems very old-fashioned to me. Don’t we all want to be rich?