A taxing dilemma

Liberal Words
. . . . . During the George W. Bush administration, a “sale” on income taxes was instituted. Unless lawmakers were being dishonest or disingenuous about their intentions the tax breaks were never meant to be permanent. Like all sales, start and end dates were determined.
. . . . . The time has come for that sale to come to an end. So why are politicians in Washington spinning this as “raising taxes” rather than simply returning to the previous tax rate? Because that is what politicians do; they take the facts and then twist them to forward their own agendas.
. . . . . It’s time to tell conservatives that we’re not going to be fooled by their deceitful spin. John Fineberg, St Paul: USA Today 9/21/2010

Discussion
. . . . . The most egregious “deceitful spin” on government revenue (i.e. taxes) is the liberals refusal to take a vote on next year’s tax rates until the last minute. This is one reason why businesses have difficulty knowing how to plan for next year. Government versus private businesses and individuals are such polar opposites in their dynamics, that the “sale” analogy is a non-starter. While government and business may both generate “revenue”, whatever the government takes, private businesses and individuals must then work with what is left over. With business what is left may be called working capital. The more government takes, the smaller the margin for hiring new folks. When taxes go up these increased costs must be covered by reducing costs somewhere in the business, or somewhere in the family budget.
. . . . . There is no government sale on tax collection in spite of what one may read in liberal letters. When the old tax rates expire those who pay taxes will have their taxes go up. This is called “raising taxes”. There is no government sleight of hand paying bills by increasing debt or printing more money. Real cash is required when the taxes come due.

 

The Antidote:
. . . . . Most all liberals are stuck in cause and effect economics. Raise taxes on the rich, and liberal economics allows you to calculate exactly how much additional revenue that will create. This liberal experiment was tried in Maryland a few years back. Maryland needed more revenue so they opted to increase the taxes on millionaires, precisely the plan being considered in Washington. They calculated exactly how much additional taxes they needed to cover the state’s shortfall.
. . . . . After tax day they were perplexed and confused!! After their tax increase they received less money than they did before the tax increase!!! Something critically important is missing in this simpleton, liberal, tax plan. What liberals miss is what is called the “intervening variable”. Something happens between cause and effect. Not only did something happen, it produced a result that was the exact opposite of what was planned by simpleton legislators.
. . . . . The intervening variable is usually the human (Hu) element. In Maryland the millionaires were not exactly bumps on a log. To avoid paying higher taxes a large number moved to states that had lower, or better yet, no state income taxes. This explains with some precision why states like Florida and Texas attract large numbers of retirees. In New York City the income tax assessment from federal, state, and city authorities is in excess of 45%. Across the river in New Jersey the property taxes alone may drive many homeowners to move to lower property tax states.
. . . . . Taking full account of the intervening variable, our simpleton legislators should focus upon government revenue, not individual tax rates. When tax rates are low the economy flourishes, businesses are confident they can cover costs, the consumer is willing to spend, and government revenue grows. The opposite is equally true. When tax rates are high the economy becomes stagnant, businesses worry about covering future costs, the consumer is less willing to spend or invest, and government revenue declines. Liberals should watch the GNP (Gross National Product) after an 18-24 month delay to determine whether the tax rate facilitates or destroys growth in the economy.
. . . . . The very folks who are most capable of boosting the economy are strangely the same ones the liberals want to punish, the evil rich. In punishing the rich through tax rates, our idiot legislators in DC are delaying, or preventing a return to a healthy economy. The higher the taxes the slower the growth.
. . . . . An analogy may capture the appropriate variables more clearly. When a ship floats it rides high or low in the water. How high or low depends directly upon the load it is carrying. Ships loaded with cargo (low in the water) require more energy to move. The same ship higher in the water moves with less energy. A high tax rate in the economy is the same as pumping water into the boat, which then moves more slowly, requires more energy, or both. An efficient economy is achieved by pumping water (or removing cargo) from a ship so it rides with less resistance through the water.
. . . . . By punishing the rich through the tax code, our idiot legislators are pumping a higher load onto the very folks who ride highest in the economic water. These same folks have the greatest flexibility of options. Do they invest in America’s future, or when the tax load becomes oppressive they may invest elsewhere? The tax rates are one major factor in this calculation. When taxes become punitive the evil rich are not the slackers. They are a big part of the solution. Surprise!!!
. . . . . If you want capital investment to prime the economy’s pump, you must provide a climate where investment may be rewarded. Confiscatory tax rates punish the very folks who are most capable of floating our economic boat. Obama and friends are working from a different principle, that wealth trickles up from the bottom, a worker’s collective.
. . . . . Responsible people want permanent solutions to cover their costs of living. Obama’s collection of Marxists and socialists have undermined every vestige of confidence in America’s future, and the responsible folks are preparing for a rainy day. Obama and friends are the rainy day. Their direction is the same as Castro’s. It only took Castro 50 years to discover that the collective does not work, and the Cuban economy is now in shambles. This is the direction we are going, but, of course, nobody in the administration will openly admit it. Many of their subversive, blame America first beliefs are finally sneaking into the light of day.
. . . . . Wake up, America, before it is too late!!!

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