Unemployment is over 8%, as it has been since early 2009. The federal government spends a trillion dollars more than it takes in each year, and both existing and newly-enacted “entitlement” programs promise to make it much, much worse. So what bold steps did the President promise to address looming fiscal catastrophe?
As I never tire of pointing out, the rich guy isn’t picking up the tab. However you define “rich,” they simply do not have enough money to pick up the tab. You can’t finance mass welfare programs without a mass tax. Europe’s welfare states impose much higher taxes on much lower incomes. That’s what we’ll face here if spending isn’t slashed. Hitting “the rich” isn’t meant to solve a problem; it’s meant to fool you into thinking somebody else will pay the tab the politicians are running up on you.
Meanwhile, taxing “the rich” really means putting a heavy new tax on business. With the popularity of “pass-through” entities like partnerships and S corporations, much of the income of “the rich” is really business income. Taxing businesses more leaves them less money to expand, hire, and service debt. Scott Hodge at the Tax Foundation illustrates this:
As William McBride notes, the top 20% of households aready pay 94 percent of the taxes, giving lie to the argument that the current system isn’t “fair,” whatever that means, or has been becoming less so. A recent Congressional Budget Office report cited by the TaxProf has some eye-opening illustrations:
True, none of the candidates are really being honest about our alternatives: spending a lot less, or taxing everyone a lot more. I wish they would at least stop insulting our intelligence by pretending that we can just continue as we are if we just tax somebody else a little more, or that doing so would actually do some good.