Does Government create jobs and grow the economy or do Taxpayers? The question seems an easy one with an obvious answer however looking at the debate raging in Washington you’d think the matter was about finding a cure for Cancer, instead.
The poor do not create jobs. The poor do not invest their money in new machinery or buy advertising. The poor do not create wealth. They do spend their money, which stimulates the economy to a degree, but not in a way that will really make a significant difference.
Liberals ignore a key fact regarding the “wealthy” in America: they have options. They can use their assets to create jobs by starting or expanding a company, they can invest their money where it will sit, or they can use the tax code to shield their assets and minimize their tax exposure. When the tax rate becomes hostile, that wealth will not be used to create jobs.
Here is an interesting graph regarding what the wealthy did with their money when taxes on their income was last reduced:
Democrats don’t want to discuss the facts presented in the illustration because it undermines their arguments. Democrats are also not truly interested in allowing the private sector, which is the true source of economic growth, to do its job. Instead, Democrats are about economic redistribution.
And cutting tax revenue cuts into the income of the Federal government, Liberals say, which makes the job of deficit reduction all the more crucial. Reduction of the deficit through spending cuts is something Liberals are loathe to do.
Here are two interesting facts from LibertyWorks’ website regarding taxes and the wealthy in America:
In 1980 there were eight tax brackets and the highest was 70%. People earning more than $200,000 reported a total of $36 Billion in income and paid $19 Billion in tax.
In 1988 there were only two tax brackets, 15% and 28%. The over-$200,000 group reported $353 Billion in income and paid $99.7 Billion in tax.
From the Congressional Budget Office December 2010 briefing:
On balance, the evidence suggests that reducing tax rates boosts work and saving relative to what would occur otherwise, if budget deficits are held the same.
That last sentence is the kicker Liberals don’t like:
…if budget deficits are held the same.
With so many things Liberals want to spend our money on, their final argument becomes that deficits will increase if the tax cuts are extended. The facts are that deficits are generated by our elected officials, not by the “rich” or the poor. Thus, our government has almost total control over whether we run a deficit or not.
Even if Liberals are correct (which they are not) why not simply cut spending then?
Because that’s not what Liberals want. Liberals use “tax the rich” as a smokescreen for income redistribution.
Don’t believe me? How about this story from Gateway Pundit via The Southeast Missourian:
In the midst of a colossal global concern for the economic stability of our great nation, Emanuel Cleaver, Missouri’s 5th Congressional District representative, has one small earmark on his wish list that deserves some attention.
Cleaver has listed a new earmark — one of several — and he promises to “fight for every one.” But this is a whopping $48 billion package that must go down as the grandaddy of all earmarks.
Proposed by a gentleman named Lamar Mickens, president of the not-for-profit Quality Day Campus, the $48 billion earmark would funnel money into the inner cities to give money to the poor and thereby produce a much larger consumer class to buy the goods and services produced in this country.
Just call this redistribution on steroids.
Once again… it is not really about helping the private sector boost the economy and thus help all Americans it is about the redistribution of wealth.