President Obama has been travelling around recently pushing what he has called the Buffett Rule on taxes. This basically is a call to raise taxes on the rich. The name comes from billionaire Warren Buffett who himself thinks it is unfair that he is paying at a lower tax rate than his secretary (though no doubt he is paying exponentially more in total). Obama just latches on to this rhetoric like ant to a sugar encrusted stain on your counter.
Obama will be running a campaign on the issue of economic equality. He feels that the wealth gap is widening and he wants to level the playing field by penalizing the rich (this is labeled by conservatives as class warfare). These sound like good things. I mean, who doesn’t want the poor to be more successful? Who wouldn’t like some more free stuff from the government? And if you want more free stuff, then by all means vote for Obama. But let me tell you, that free stuff comes with a price, and that price is economic hardship for all.
In his most recent State of the Union Address, President Obama called for taxes to be raised to at least 30% on all those who make more than one-million dollars a year. This is part of a campaign to end the Bush Era Tax Cuts. Currently, depending on how the money is acquired, millionaires are paying anywhere as low as 14% to around that 30% in taxes. Obama wants to raise that so every millionaire is paying 30%. But they can afford it right? I mean these guys are filthy rich right? Why not give up some of their money to help us? Why can’t they just be willing to make a little more of a sacrifice which even isn’t that bad in order to benefit the country? Why? Because more money to the government means more money wasted.
Money wasted? What are you talking about? Obama has done good things with our tax dollars!…Umm…consider this. Take a look at this chart:
I know this image is small, but this is showing just how much money has been added to the national debt by our dear Barack Obama. We were not in good shape when Obama took office and then we were only at $9 trillion. Can you fathom the significance of what was just said. If you told someone 4 years ago, “At least we are only $9 trillion in debt” they would think you’ve gone mad! But now look. In less than one term as president, Barack Obama has close to doubled the national debt. Doubled! But it was worth it, you say. Really? What has Obama done with this six plus trillion dollars? Are your streets paved with gold? Cause mine sure aren’t. Fine, enough with the facetiousness, but what about the economy? Sure the unemployment rate is dropping but here’s a little fact the White House won’t tell you. They stop counting people in the unemployment numbers when they stop looking for work. They don’t count people who have given up because it’s simply too difficult to find a job. Okay, I know some people reading this are going crazy now. Fine, I’ll give it to you that the raw number of jobs has slightly increased as of late. But after 3 years and $7 trillion I would sure hope so! The argument here isn’t that government spending can’t have a positive impact on the economy. The argument here is that government spending is inefficient and money in the hands of individuals would be far better than in the hands of politicians looking to give hand outs.
Let’s think about this. Say we take a wealthy man who makes, let’s say $10 million a year. Okay so this guy is pretty loaded. He’s no Donald Trump, but this guy doesn’t really want for anything. According to Obama’s new plan, this man would pay $3 million in taxes! But now let’s think. What is the government going to do with this $3 million dollars? Well, if it’s anything like the $7 trillion it’s already had to borrow, it’s not going to do much. [Side note: Keep in mind that the national deficit number does not show how much money is spent, just the amount of money borrowed to keep spending. So it spends every penny of your tax dollars PLUS $7 trillion more]. That money would probably go to funding some socialized health care bill, or go to support some green energy plant that goes bankrupt like the rest, or on a less cynical note, maybe it goes to creating another branch of a government agency, thus creating more jobs. Well that’s good right? More jobs? In this case no, because what are people producing in these government agencies? What goes on there that stimulates the economy. Short of providing a pay check, absolutely nothing.
Now let’s continue our hypothetical and look at our millionaire. What could he do with that $3 million? Well he could put it directly into the economy. First off, if this guy is making lots of money, it is likely that he owns some sort of company. With $3 million, he could expand his business, open up new branches in new places. Do you know who then runs those new branches? New employees! And what are they doing? Well a lot more than wrapping us up in red tape at the DMV. They are coming up with some sort of product or service that people want and will pay for. People get their product or service, new employees get a nice pay check, rich man gets even more rich! Wait a minute, why do we care about the rich guy getting more rich? Because then he can go and spend it! You know all of those specialty products that are made by small business but are too expensive to buy? You know, those like gourmet cheese, or engraved crystal glass ware, or strawberries dipped in 50 types of chocolate. Well, rich people buy that stuff. But why do I care if the rich people can eat weird looking cheese?! Because when they buy it, the small business owner who makes it gets money, then small business owners can become big business owners and guess what, open a new store and hire new people. Do you see the cycle here?
So next time Obama cites Warren Buffett’s poor secretary (and believe me he will) think about this. Instead of raising the taxes on the rich, let’s cut useless government spending and lower taxes on everyone. Let’s put money in the hands of the people, not the government.
Mitt Romney, in a Wisconsin campaign speech said, “The Declaration of Independence guarentees the pursuit of happiness, not the outcome… this is a land of opportunities, [not handouts]” You would be amazed what things we could accomplish if we didn’t have the government trying to dictate our lives.
For more politics explained on this issue, see an earlier blog post called “The Specter of Success.” Also, for more information presented in plain, clear English, be sure to “like” our Facebook page by clicking this convenient link. You can also follow me on Twitter @PPLvI.