President Obama and his sycophants in Congress are again on their rant about raising the taxes on the millionaires (defined as a family making $250,000 or more) and other people who need to pay their fair share. Here’s something he and the leftstream media are not going to tell you. It doesn’t matter, not one iota, if Obama gets the tax rate increase he wants. It won’t fix the problem. It will be barely noticeable. It will likely do harm.

The President does not come right out and say it, but it is implied that if only we raise taxes on the rich all of our budgetary problems would disappear. Listen to this clip.

http://www.hark.com/clips/hmtzzhwlcw-raise-taxes-on-the-rich

He says if we take money from the rich and give it the poor the economy will be back in balance. The word ‘balance’ is in there for a reason. People hear that and they think “balanced budget”. Then they make the leap from “balance budget’ to “Tax the rich and we balance the budget”. Again, the President doesn’t say this. But, it is clear he wants you to infer this.

So, first let’s shoot that down right now. The Clinton Tax Rate Increases, that President Obama wants Congress to reinstitute on families making above $250,000 and individuals making above $200,000 (millionaires?) are projected to raise annual revenue from as little as 65 billion per year to as much as 400 billion per year. Other sources say revenues will actually go down as those “rich’ people shelter their income more efficiently.

For argument’s sake let’s say that we will be rolling in the dough and bringing in 400 billion more each year. In 2011 the budget deficit, the amount money we need to bring in so we have as much as we spend each year, was 1.6 trillion. That’s trillion with a capital ‘T”. That’s trillion, as in 1000 billion. The 400 billion of additional revenue is a big maybe. The 1.6 trillion shortfall is a carved-in-stone fact. We are talking a pie-in-the sky- best-case scenario of reducing the deficit by 25%.

You say “Great! That’s a good start”. I say “Weren’t you listening?” Maybe we will raise 400 billion. We might get even less money. But, we are definitely planning on spending every dime and then some to create the deficit.

“Yeah, but we can try it and maybe at the same time reduce spending in areas where we can afford it; like Defense. You know we spend more than every other country in that area.”  comes your reply.

We have played this game before. If we cut out every single dollar going to Defense, every single dollar, our deficit drops from 1.6 trillion to 700 billion. So if we tax the rich, cut out all defense (throwing a few million people out of work in the process, and turning our Recession into a full fledged Depression) we are still 300 billion short, IF things play out in the best case scenario. But, we also get invaded by a foreign country (other than Mexico), and must learn to speak Russian, Chinese, or Farsi. 

I stumbled across a posting on Facebook called “7 Biggest Economic Lie” by Robert Reich. (See the picture to the right. To read his actual words go here). As I read through them I could not help but think that this was once again pure propaganda by the liberal left. I am a bit familiar with Robert Reich. He was Bill Clinton’s Secretary of Labor and Harvard educated in Politics and Economics. In short he should know better. At best these are all half truths and misrepresentations. At worse, to someone completely unfamiliar with these issues, they are lies. In subsequent blogs I might more directly rebut what Mr. Reich has to say. But for now, how about a list of “Seven Undisputable Economic Truths”

1) Someone has to first create wealth before it can be taxed.

You would think that there is no reason to explain this one, but for the liberal left, which Reich is a card carrying member, there is. It is impossible to tax good intentions. In order for there to be money to pay for anything government provides, someone, like the stigmatized “rich” must
created a good or service. Producing that good or service creates jobs. The jobs created income. The income is taxed. There is no other way. Anything that government pays for; be it the Army, a teacher’s salary, to build a road, or the National Endowment for the Arts is done so with money from the wealth created by others. Period.

2)  A Tax Rate Cut is not the same as a Tax Cut

A Tax Rate is the level at which a dollar of income is taxed. The tax is the amount of money collected. These are not the same thing. You can tell when a politician is either ignorant or lying to you when he or she says “tax cuts for the rich” When Reagan and Bush II cut the tax RATES, the amount of money that the federal government collected went up. Again, the amount of money collected, the tax, went up. This is because “the rich” are not stupid. When tax RATES are too high, they find a way to not expose that income to be taxed. When the RATES are lower, it is not worth the effort. This relation ship is expressed in the Laffer curve. Learn about it here.

3)   Government jobs are overhead.

Every single government job is funded by taking money from someone else. I am not saying that government jobs are not needed. Soldiers, police, firemen, and many more are vital to society, and needed to be funded by the public. But, that does not alter the fact that all of those jobs are overhead. Every government job, and the overpaying of a government job (caused by public sector labor unions) takes money away from the public. That is money that the public could be spending to produce a reason for private sector jobs to exist. Private sector jobs actually add to the treasury, instead of subtracting from it. Private sector jobs are good. Public sector jobs are a drain on the economy and need to be held to a minimum.