COMMENTARY | According to the Huffington Post, President Obama is re-engaging Republicans in his fight to increase taxes for the super rich.
"If we choose to keep those tax breaks for millionaires and billionaires," argued the president, "if we choose to keep a tax break for corporate jet owners, if we choose to keep tax breaks for oil and natural gas companies that are making hundreds of billions of dollars, then that means we've got to cut some kids off from getting a college scholarship, that means we've got to stop funding certain grants for medical research, that means that food safety may be compromised, that means that Medicare has to bear a greater part of the burden." G.O.P. leaders, and some Democrats, argue that raising taxes in a bad economy would only make matters worse.
The president is well intentioned, but on this issue, he's simply wrong. To know how wrong he is, one only has to look as far as the response from Amazon.com and Overstock.com this week, which both closed down thousands of jobs in California in protest of a new California law that imposes California sales tax for online goods. Rich people didn't get rich because they are stupid. In fact, they got rich and continue to stay that way because they are not. Extra tax burdens on rich people are nothing more than a job killer and/or an inflation trigger. Rich people en masse will never sit idly by and take a smaller cut of the pie for the mere benefit of "wealth redistribution."
In his book, The Audacity of Hope, (on pages 189-191) Sen. Barack Obama recounts a story of meeting Warren Buffet in his Omaha office wherein Buffet said that he pays too little in taxes and that the government should charge him more. I think, perhaps that Obama put too much stock in the logic of an old man with nothing to lose (Buffet didn't talk like that in his late 40's and early 50's) instead of paying attention to the reality on the ground when it comes to the repercussions of taxing wealthy people more than they want to pay. They won't pay it without exacting some sort of retribution that runs counter-productive to the intent of the tax.
The truth is that as a percentage of income, wealthy people do pay fewer taxes, but the other truth is that dollar for dollar, the super rich pay more in taxes in a single year than many of us will ever earn in an entire lifetime of work, and that has to be factored into the equation. Dollar for dollar, they are already paying more than their fair share, and they get less for it. They don't have a special lane on the highway. Their gated communities don't need much in the way of police protection. They use fewer government services and entitlement programs, but they pay more for them.
No matter how much we may wish to begrudge the wealthy man his money whilst we scrape and save to make ends meet, the wealthy man's money is in fact, his money. He's entitled to it. I understand that the president is in a tight spot, in a country that has maxed out its credit cards and then some, but the truth of that doesn't necessarily mean that the most sensible solution is to take money from those who have it.
If you want to put a nation to work, figure out how to help wealthy people get wealthier. That's not just the bread and butter of the economy. It's the meat.
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