Obama’s Continuing War on the Wealthy
President Obama’s lackluster speech on America’s budgetary woes was long on campaign cliches and short on substance. It featured the same tired, old “rob the rich” rhetoric that has become the hallmark of the Democrat Party. For at least the last forty years, Democrats have engaged in relentless attacks on everyone who dares to earn more than their fellow citizens.
Why? Because Democrats do not see taxes as a way of responsibly funding necessary government activities – instead, they view the tax code as a means of redistributing income. But in order to dole out money to people who didn’t earn it, Democrats have to take money from those who actually did earn it. Which means they’ve had to create a strategy to make such policies palatable.
To get average Americans to go along with this legalized theft, Democrats first demonize those they intend to rob, thus making the average person fell less guilty about participating in the robbery. But Democrats have also concocted some amazingly deceptive language in order to disguise what they are actually doing. For example, they yammer on about the “cost of tax cuts” – as if NOT confiscating as much of your money as they did before is somehow an EXPENSE. As anyone who owns a business knows, this is absurd.
Not surprisingly, Obama attempted to play to his far-left base when he declared that he would not extend the so-called “Bush tax cuts” – claiming that the cuts “cost” a trillion dollars. Obama then referred to the home mortgage loan interest deduction as a “tax expenditure” - an oxymoron if ever there was one – reducing some one’s tax bill is not an “expense” in the mind of any sane person. But this kind of “thinking” is typical of socialists like Obama, who believe that it is the job of government to determine how much of your income you are “allowed” to keep. So any time you keep more of YOUR money, Democrats see it as “costing” THEM!
And like most liberals, President Obama displays a frightening lack of understanding of the dynamic nature of the nation’s economy, and how it reacts to to changes in tax policy. Ask a liberal how much revenue will be collected next year if we raise a particular tax by, say, 10% and they will naively (and incorrectly) respond “it will go up by 10%”
But as any economist, or just an astute business owner, knows, when tax RATES are increased, there is an inevitable REDUCTION in economic activity, which is the primary determinant of total tax revenue received. So, not only will there almost certainly be an increase in revenue that is LESS than 10%, if the depressive effect on economic activity is dramatic enough, it may even result in a DECREASE in real dollars collected.
Conversely, cutting tax RATES has proven time and again to result in an increase in economic growth, which naturally means GREATER revenues. This has happened time and again throughout the nation’s history – JFK’s tax cuts spurred economic growth, as did Ronald Reagan’s. If you do not grasp this amazingly simple yet essential economic reality, you will likely fall prey to the budgetary sleight-of-hand that Obama and the Democrats are perpetrating on the nation. In fact, they are counting on your ignorance.
What Obama did NOT address was the real problem that we are facing: out-of-control spending financed by stratospheric debt. And unless and until we get serious about cutting spending, our situation will only worsen. But that will require that both Democrats and Republicans face up to the fact that we need to be talking about TRILLIONS in cuts, not the embarrassingly tiny (and ultimately inconsequential) numbers currently on the table.
Obama’s speech shows that he has not the slightest intention of abandoning his big government socialist agenda, including the continual attacks on “the rich.” Sadly, while the “young guns” like Paul Ryan are attempting to face up to the challenge, too many of the “Old Guard” Republicans still seem to lack the testicular fortitude to make the kinds of dramatic changes that are necessary to save our nation.