0bama has released his decennial budget, and boy does it sock the taxes to us. The 10-year level of taxation is 2% of GDP higher than it is historically.
What is even more interesting is that he projects increased revenue due to this. Despite the fact that increased taxes can be correlated historically with lower Federal revenues. This is not my correlation. Credit is given in the URL.Correlation of Tax Rates to total Federal income as percent GDP.
The Twenties roared. The Thirties whined. The 70’s economy was putrid. The 80’s economy was really good. The 2000’s did well. The 2010’s suck. All six periods started with a similar downturn. In the Twenties, the Eighties, and the 2000’s, all came back with robust employment. In the other three, employment was horrible.
Robert Samuelson has quoted the new darling of the 0bama administration’s economic theory. http://news.investors.com/ibd-editorials-on-the-left/042114-697766-rich-need-to-pay-more-to-make-society-more-equal-says-economist-thomas-piketty.htm What I want to know is: how, if there will be less revenue and fewer people working, will the haves vs the have-nots shrink? You have no way for the middle class to amass wealth other than by working and “getting ahead”. The only way that this theory can work is if the rich are “cut down to size” by punitive taxes.
Which brings me to my questions of Bob Samuelson, 0bama, and his author: 1) How will people who don’t work get rich? That is, right now, 1/8 (12.5%) of the population that is not working. How will you boost their wealth and their income?
Two other questions: 2) What level is enough? Never can get someone spending other people’s money (socialists) to tell you when they will be satisfied. Always want more. Note that on the first graph, marginal rates have been in the 90% range. Right now, it is 6 for you and 4 for me (about 40% top marginal). In the past it has been 1 for you and 9 for me (90%) rate. I don’t see “progressives” ever admitting that they take enough.
3) How will you generate enough revenue to balance the debt from your social spending?
Based on prior budget numbers, 0bama still spends at a record deficit pace despite all of this money he projects coming in. The deficit keeps growing. Note that 0bama does not predict the deficit getting bigger, but he also doesn’t trim any spending.
Both liberalism and insanity consist of doing the same thing over and over and expecting a different outcome.