Posts Tagged ‘top 1 percent of earners’

If Rich People Are Evil Like Obama Says, You’d Better Pray They Don’t Get Their Taxes Raised

April 26, 2011

Obama routinely demonizes rich.  He tells us they’re not good people, that they don’t care, that they don’t pay their fair share even though they pay MORE than their fair share when you consider the fact that nearly half of Americans pay no federal income tax at all.

There’s just one problem with Obama’s demagoguery.

If you think the rich are evil and greedy, then why do you not think that if they get their taxes raised, they won’t just pass those taxes onto you in the form of higher prices?

Here’s the thing about taxes on the rich: all the rich would have to pay them, and all the rich would have their taxes increased by the same percentage, and they would all have their taxes increased at the same time.

If you raise the taxes of the rich (who own and run all the businesses), you wouldn’t get everyone raising their prices right away, nor would they all raise their prices by the same amount.  But every single owner and chief executive is going to face the same increase of cost in doing business.  And over time – if there is anything in the universe called “equilibrium” – they will raise their prices for their products to compensate for that higher cost of doing business.

And given that the 2nd law of thermodynamics – which is ALL ABOUT a system’s tendency to reach equilibrium – is one of the best attested principles of science, I would argue that voting to raise taxes on the people who run the businesses is pretty much a 100% guarantee that you will be raising taxes on yourself via higher prices.

The only businesses that will suffer, and the only “rich people” who will lose their “riches,” will be the smaller small businesses who don’t have the resources to last through the transition period which will ultimately end with the customers paying the higher prices and thus the higher taxes.  Businesses will pass their higher taxes onto the consumers who buy their products.

Think of automotive tires.  Let’s say you increase the taxes of every single tire producer and dealer by 10%.  Do you seriously not think that, over time, you won’t end up paying the lion’s share of that 10% increase in higher prices for tires?  And it frankly doesn’t matter what product or service we’re talking about.  If you want the lowest prices, keep taxes down and the government off the backs of the producers, distributors and sellers, and allow them to have a fair fight with each other to compete for your business.

Think I’m wrong?  Keep reading.

There’s this other little fact that the leftist demagogues never bother to pay attention to: lower tax rates on the rich actually invariably result in the rich paying a higher percentage of all taxes paid:

In 1980, the top 1 percent of earners paid 19 percent of income taxes, and the bottom half of earners paid 7.1 percent. A decade later, with a lower maximum rate, the top 1 percent paid 25 percent of taxes, while the bottom earners paid just 5.8 percent. By 2008, top earners paid 38 percent of taxes, the bottom half 2.7 percent.

Put another way, when you examine the Treasury Department data in lieu of the Bush tax cuts:

The rich are now paying more than they would have paid, not less, after the Bush investment tax cuts. For example, the Treasury’s estimate was that the top 1 percent of earners would pay 31 percent of taxes if the Bush cuts did not go into effect; with the cuts, they actually paid 37 per­cent. Similarly, the share of the top 10 percent of earners was estimated at 63 percent without the cuts; they actually paid 68 percent.

Which is to say that if I really hated people who weren’t rich, I would show my hate by raising the tax rates of the rich.

It’s a Charlie Brown thing.  As long as that bald fool keeps thinking he’s going to kick the football with Lucy holding it, he’s going to keep ending up flat on his back in pain.

In a war, in a game of strategy, or in many sports, the very best and most ruthless way to win is to make your opponent think that if he does X he will gain an advantage.  But the moment he does X, you seize the advantage and destroy him.  And as long as the poorer classes keep falling for this Marxist demagogic class warfare trick, they’re going to keep screwing themselves.

There are a number of reasons for why keeping low tax rates for the rich results in their paying a higher percentage of taxes paid.  Most basically, if you allow the rich to keep more of their profits, they will invest more and take more risks.  And the result is more opportunity and more jobs for all.  If you demagogue the rich and try to seize more of their profits, they will shelter their money and act in ways that hurt the overall economy and most definitely hurt the poor.

That is the short of a much longer article I wrote entitled, “Tax Cuts Increase Revenues; They Have ALWAYS Increased Revenues.”  And there’s only about a hundred years worth of data (which you will see in the article) that proves the basic statement of that article is true.

So, if you allow Barack Obama to be your Lucy and trick you into trying to kick the rich, all you’re going to end up doing is hurting yourself and hurting the economy.  You’re going to end up flat on your back just like Charlie Brown, and Obama as Lucy will keep playing the same trick on you over and over again.

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