Wednesday, December 29, 2010


That supposedly incongruous fact is heresy to liberal Democrats, as it is ingrained in their psyche that we always need more government revenue and imposing or raising taxes is the way to accomplish that end. I hate to burst their bubble, but, as usual, they are economically wrong and history bears that out.

John Kennedy, Ronald Reagan, and George W. Bush all lowered the marginal income tax rates and government revenue increased as a result. Despite that fact, liberal Democrats have put on their blinders and have been using as their battle cry, throughout the decades, that we must increase the tax rates to get more revenue, especially against the high income earners whom they despise and demonize in order to try to appeal to the larger base of voters who are considered the so-called middle-class and poor. They never mention the fact that the top 10% of all taxpayers (people making more than $114,000) pay approximately 70% of all income taxes. There's a limit as to how much taxes they are willing to pay.

Because of the lowered Bush tax rates, put into effect in 2001 and 2003, the amount of revenue collected by the government increased by over a half a trillion dollars over the collections of 2000 to 2007. So how come when we lowered tax rates, the revenue went up? Doesn't that go against the prevailing opinion of the liberal Democrats that the tax rates caused the tremendous deficits that we are experiencing today? Not really. We don't have a revenue problem, we have a spending problem, and President Obama and the Democrats have been acting like “drunken sailors” (I apologize to drunken sailors as they are pikers as compared to them) in spending the taxpayers money and borrowed money. In fact, the spending is absurdly above historical levels right now and is unsustainable. It is driven by payments for individuals (64% of federal outlays) and entitlements, especially health care spending. ObamaCare did not bend the health care curve down, either, it bent it up.

Another fallacy brought up constantly by the liberal Democrats, is that the deficit is due to military spending. That is a myth. If military spending had been eliminated in its entirety in 2009, the deficit would still have been $776 billion. An historical high. Defense spending is 1/5 of the federal budget and less than 5% of GDP. In fact, President Bush presided over smaller defense budgets (as a fraction of GDP) than all the presidents from 1941 through 1993.

What the liberals don't understand about economics is the principle of the “point of diminishing returns”. When you raise taxes over and above the point where the people being taxed feel that it is unfair, they will use loopholes in the law (because they can hire professionals such as accountants and tax lawyers), and they are able to adjust their spending patterns so that they will wind up paying less at the higher rates than they would have paid under the lower rates. They also may vote with their “feet” and move to a more hospitable tax environment, like overseas.

Because many liberals are brainwashed into thinking that successful people (ex. high income earners) must've gotten those monetary gains by way of cheating or by exploiting others, they want to punish them by raising their income taxes (the class warfare ploy). Envy seems to be the major, staple sin that infects most liberals. If I can't achieve what you have achieved, than I want to “even out” the playing field and redistribute your money to the less successful, is their battle cry. That's right out of the Karl Marx and Saul Alinsky playbooks.

So if the government wants to get more revenue, don't raise the marginal tax rates because lower (reasonable) tax rates equal increased revenue. That's a fact, look it up!

Conservative commentary by Chuck Lehmann

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NNN Commercial Real Estate said...

If the current administration is so concerned with the middle class, why not lower taxes on the middle class? Many middle class Americans run a small business and pay rising Commercial Business fees and taxes. All those Voters who were for Obama’s big government spending when they didn’t have to pay for it. Many people said "Tax the rich". That will solve everything. But now middle-class America will have to pay for Obama’s massive spending

Robert Hansen said...

In the words of Winston Churchill, he said these profound words, "I contend that for a nation to try and tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle".
Why is it so difficult for liberals not to understand basic economics? It has to be the "envy" factor as to why they want to punish successful people and redistribute their wealth (classic "class warfare"). I guess they figure that by giving freebies to the middle and lower classes, they will garner more votes because there are more of them than there are rich people.

Sandlot King said...

According to Obama’s “class-warfare” the "haves" must be punished and the have-nots rewarded. He thinks he is creating “a sense of balance, and fairness in our tax code.” Obama doesn’t tell us what “balance and fairness” mean in Obama’s world.