It’s an election year, and the Dems are warming up their “tax the rich” chorus. Speaking at the Senate Finance Committee, Senator Mark Warner (Commie-Va.) said:
The main goal here is this can’t just be a debate about the 2017 tax cuts. This is going to be Tax Armageddon. It’s time to suit up
(Article by John Green republished from AllNewsPipeline.com)
The Dems want the biggest tax increase in history, and they threaten that if the Republicans don’t agree to tax the rich into oblivion, they’ll allow the Trump tax cuts to expire. Warner is throwing a tantrum and threatening economic “mutually assured destruction.” If they’re not allowed to pick the pockets of a minority of citizens (the evil rich), we’ll all go down.
Anyone who learned his multiplication tables and knows how many zeros are in a trillion knows that we have a spending (and debt) problem, not a tax problem. Our federal debt now approaches $35T, and it’s expected to top $50T by the end of this decade. That’s over $100,000 of debt for every man, woman, and child legally in the United States. We are way beyond being able to fix this problem with a tax increase.
When politicians demand tax increases, they aren’t talking about increasing tax revenues. They’re demanding an increase in tax rates — which does not necessarily equate to more money for our “public servants” to spend.
Economist Arthur Laffer posited that beyond a certain point, tax rate increases cause declining tax collections. His theory is that beyond some critical peak in the rate/revenue curve, tax increases trigger economic slowdown, resulting in less income to be taxed and lower deposits to the federal checking account. When tax revenues went up after both the Reagan and Trump tax cuts, it hinted that Art might be on to something.
The question is, are we currently past the peak in the Laffer curve, where tax increases are counterproductive?
The federal government is currently adding $1T of debt every 100 days. That means our “public servants” in D.C. are spending $300B more than they have, every month. If we were to balance the budget with a flat rate increase across all income brackets, the taxes for an average family of four would need to increase by $4,000 per month (over what they currently pay)! That would simply make the average taxpayer a felony tax evader. People in prison don’t pay taxes, so tax revenues would go down, not up.
But Senator “Tax the Rich” screams: But wait! We’re only going to raise taxes on those who can afford it, the filthy rich. I have a question for our math-challenged senator: how did the rich get rich?
They acquired their wealth by providing a product or service that others wanted, and they generally use their wealth to do more of the same. What the “tax the rich” crowd hates to hear is that the rich use their money to create jobs for other people — by employing people in their businesses, investing in other creators of employment, or buying products from companies that employ people. In fact, the rich are wealthy only because they are the most efficient growers of the economy among the population.
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