How refreshing it was to read Rep. Michele Bachmann’s choice of words when she said, “I called for the current tax rates to be made permanent for all Americans.” Finally, a Republican who refuses to use the term “Bush tax cuts” when alluding to our current tax rate.
As I have repeatedly pointed out, when politicians and media pundits talk about the “Bush tax cuts,” they clearly are implying that the normal, acceptable tax rates are whatever they were before President Bush reduced them. Claire McCaskill recently summed up this warped far-left viewpoint when she said, “If they think it’s OK to raise taxes for the embattled middle class because … we don’t GIVE more money to millionaires, it really is time for people in America to pick up pitchforks.”
I understand that lefties like McCaskill are hopeless, but I often wonder if I’m the only one who finds it odd when a Republican legislator says, “You don’t raise taxes in the middle of a recession.” Such a statement implies that it’s OK to raise taxes when times are good. Sorry, but there’s no such thing as a good time to raise taxes.
If raising taxes is a bad thing to do during a recession, why would it be a good thing to do when the economy is strong? What would be the objective – to try make a strong economy weak? If high taxes are good for the economy, let’s have high taxes permanently. But if they’re bad for the economy, let’s get rid of them altogether.
Personally, I favor a totally voluntary tax system (which, at least to some extent, is what a national sales tax is), but that’s a whole book unto itself, so I won’t go there right now. That said, if we’re going to have taxes at all, how about a regressive tax system whereby the more you make, the lower your tax rate is? Under such a system, anyone with a net income of, say, more than a million dollars a year might not pay any taxes.
There are two excellent reasons why a regressive tax system would be a good thing for America. First, it would reward people who work hard, create products and services that make our lives better, increase employment and stimulate the economy. Why shouldn’t people be rewarded for their success, especially when they make the lives of others better in the process?
Second, it would motivate everyone to work harder to increase his value to others, knowing that the greater his income, the less he would pay in taxes. It’s the precise opposite of unemployment benefits, which motivate people to work less.
So at least part of the tradeoff Congress has been debating is this: The Democrats are willing to go along with a temporary extension of the “Bush tax cuts,” but in return the government must go further into debt by handing an additional $56 billion to people who aren’t working. (There are many other pieces of pork involved, but the extension of unemployment benefits is the most glaring.) Sorry, but that’s not what the tea-party people voted for.
When the government hands out unemployment benefits, it’s the equivalent of millions of working people being forced to spend more, because money is taken from them and handed to unemployed people to spend, albeit it may be done indirectly by increasing the money supply (which taxes them through higher prices). Of course, higher prices don’t hurt recipients of unemployment benefits as much, because everything they buy is really free to them anyway.
But their purchases do give the short-term illusion of a stimulated economy. I say illusion because the overtaxed person, in turn, slows the economy by cutting back on his own purchases and, worse, by not expanding his business and firing, rather than hiring, employees.
Republicans will be shooting themselves in the foot if they finalize a deal that includes an extension of unemployment benefits. Why don’t we stop kidding ourselves and admit that this insidious transfer-of-wealth program is evolving into a guaranteed minimum income (via never-ending extensions). Sorry, Nancy, but unemployment benefits accomplish just three things: They 1) increase the deficit, 2) cause unemployment and 3) slow economic growth.
No one knows the exact degree of the tradeoff, but the big picture is that in a compromise scenario people would get to keep more of their own money because taxes would not be increased (for now), and some would use it as an opportunity to expand their businesses and create jobs. But the increase in unemployment benefits would offset much, if not all, of that illusory economic stimulus by bleeding vast sums into idle hands.
Again, this is not what the tea-party elections of 2010 were about. Tea-party people thought they were voting for candidates they believed would cut both taxes and spending. For the Republicans to compromise right out of the starting gate is not a good sign.
A lack of compassion? It’s all in how you view the world. In my view, to be in favor of freedom for everyone is as compassionate as you can get. The progressives’ brand of compassion is phony because it advocates a violation of the liberty of those they deem to be “rich.” The tens of millions of people who fled their countries to reach our shores didn’t think of capitalism as an uncompassionate system. They were focused on the freedom and opportunity America offered.
The politically incorrect truth that no one wants to talk about is this: Most Americans are spoiled! The conservatives in Congress have less than two years to demonstrate, through their votes, that they’ve learned their lesson and are prepared to defeat progressivism at every turn.
The clock is already ticking, and the new Congress hasn’t even been sworn in. I suggest that its conservative and libertarian members have a long meeting and remind each other just what it was that got them elected on Nov. 2.