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Tax the Rich Until They Bleed

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And when there’s no more blood, what then? Obama and the liberals love their populist meme: Tax the rich because they are not paying their fair share. Obama and at least some liberals know that is not true but they continue to beat this drum. Why? Because it’s an easy sell. When people are hurting, they want someone to blame . And, of course, Obama thinks this class warfare cry of tax the rich will get him re-elected. People need to know the truth about taxing the rich. There are a lot of myths out there. Below is a video that should go viral that I found Reason.com. Please take the time to watch it.

Obviously, taxing the rich is not the solution. Are there problems with the tax code and all the “loopholes”. Yes, and the tax code does need to be addressed. But that would only make a small dent in our problem of debt and deficits.  The real problem isn’t the rich. The real problem big spending big government and the effect it has on the economy in general.

Many conservative are like to say: We don’t have a revenue problem, we have a spending problem. I get upset when I hear this. We do have a revenue problem. Not because any segment of our society is under taxed but because we as a country stopped being producers and became a country of importers. I’m talking about our balance of trade. It has been getting worse sence the sixties and it is accelerating. I’m not going to try to explain the trade deficit issue here. I’m not qualified. Suffice it to say that we import in dollar terms far more than we export. That difference must be finance with debt. We could talk for hours over the whys that got us to this point.  My point is that while we are debating how to reduce spending, we also need to focus on how we can grow our economy and in so doing increase tax revenues.

That I am aware of, there is only one presidential candidate talking about revitalizing our economy and that is Herman Cain. How? By reducing taxes that affect businesses and corporations.

The US currently has the highest corporate tax rate in the world at 35%. Herman Cain wants to cut that to 25%. That’s good but I’d prefer 20% or even 15%.  Doing this would help bring manufacturing back to America and help us compete in the world markets.

Herman Cain also wants to eliminate the US tax on repatriated foreign profits. Currently, US companies have nearly a trillion dollars in Un-patriated after tax (foreign) profits. These dollar do not come home because our government wants to tax them again. As a result, the US gets zero benefit from these trillion dollars. It doesn’t make any sense to me. How much of that money would come back and be invested here, I don’t know. But any amount would be better than what we get now.

Herman Cain proposes to eliminate capital gains tax. I have no doubt that doing so would be a big incentive fo investment in America. however, I personally believe the capital gains tax should be used to discourage speculation as wel as encourage investment. I would prefer very high capital gains taxes on investment held for one year or less. For investment held one to two years the tax would be less and for investments held for tree years or more the capital gains tax would be zero. Speculators or gamblers, in my opinion, do more harm than good for a free market economy because of the distortions of market signals that they cause.

Let’ recap the three points I’m trying to make today:

  1. Obama’s tax the rich plan will not do any good and could do much harm.
  2. We must have a reduction in spending plan that will lead to debt reduction not just deficit reduction.
  3. Accelerating trade deficits are going to sink us. We need a plan to grow our economy. A growing economy will increase tax revenues. And right now Herman Cain is the only one talking about this.

Any way. That is what I’m thinking about today. What do you think?

Original Post: Conservatives on Fire

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  • http://www.countrythinker.com Country Thinker

    There is an interesting policy conflict working here I’ve talked about in the past. Many on the left want to soak the rich, and many (such as Robert Reich) argue that the rich don’t help the economy because they don’t spend all that money. But Bernanke says QE2 is intended to help with unemployment through the “wealth effect,” saying that putting money in the hands of the wealthy is the best way to bring down unemployment!

    So there you have it – Bernanke wants to print for the wealthy, and liberal politicians want to take it back through taxes.

    To quote Hank williams, Jr., “round and round it goes, where it stops, who knows – the American Dream.”

    • http://conservativesonfire.wordpress.com Jim at Conservatives on Fire

      Well said, CT.

  • http://capitolcommentary.com Harrison

    Exactly… reduce taxes. There is a reason we import so much. Taxes aren’t the only reason but they sure are a big one.

  • http://conservativesonfire.wordpress.com Jim at Conservatives on Fire

    I’m convinced that while we are fighting over spending cuts, we must also be working on ways to get this stagnant economy going again