4/24/11
Talk about taxes and deficits seems all the rage now. More popular than Jersey Shores China
#1 foolish misconception: Wealth is static. Some people (liberals) seem to think there is a fixed amount of money and if one person makes a lot, it’s because it was taken from someone else. Wealth is not so much to be made by all but to be spread around. Two seconds of thought would obliterate this foolish notion. 150 years ago, most babies died and leisure time was only for the rich. In the last 50 years, people have gained leisure time, bigger houses (The size of homes has more than doubled since 1950.), more mobility, more and better gadgets, and longer life spans. Across ALL income levels we spend less of our income on food and necessities.
#2 foolish misconception (a favorite of the left): The government creates jobs. The government does not make money and therefore cannot create a job. All it does is take money out of the economy and put it somewhere else. At best, that is a net wash of jobs. More likely, however, that money would have flowed naturally and efficiently to where it was needed. The government artificially moves it to somewhere after it is eaten up by the usual waste and fraud.
#3 foolish misconception: The rich hardly pay any taxes. The top 1% of earners pay 38% of all federal income taxes. The top 5%? 59%. The bottom 50%? Less than 3%. The percentage of federal income tax that the bottom 50% pays has also dropped substantially since 1980, from 7% to 2.7%. http://www.taxfoundation.org/news/show/250.html
#4 foolish misconception: The rich get richer and the poor get poorer. This is half true. The stinking rich are indeed stinkier and as a share of total income, the bottom 50% do have a smaller percentage, 17.68% in 1980 and 12.75% in 2008. However, looking at data to 2008, the poor are not getting poorer. The poverty rate has dropped from 22.4% in the 1950’s to 12 percent in recent years. http://en.wikipedia.org/wiki/File:US_poverty_rate_timeline.gif. The bottom 20% average income dollars has roughly stayed the same according to one source, http://en.wikipedia.org/wiki/File:United_States_Income_Distribution_1967-2003.svg , but has risen greatly according to others. A May 2007 report by the nonpartisan Congressional Budget Office, http://www.cbo.gov/doc.cfm?index=8113, stated that the poorest fifth of families with children had the fastest overall earnings growth, more than 33% between 1991 and 2005. It’s true that top incomes have climbed substantially but the poor are no worse off and are indeed much better off by many measures. Poverty used to mean hunger. Now, the poor are often obese, the problem being an abundance of cheap and tasty food. (Taco Bell
#5 foolish misconception: Our governments are not really broke; They just lack the political will to tax the rich. It’s true there is a great deal of money out there and if the government just took it, it would indeed solve the budget problem. But what would we do next year when the economy collapses? Why do some people (liberals) fail to realize that if the rich are targeted, they will invest their time in tax avoidance or, God forbid, stop spending money altogether. At some point, higher taxes have to discourage the risk taking necessary to invest and create new businesses. They don’t hide their money under mattresses (not yet anyway). They put it to work, which creates jobs. This was a major lesson FDR never learned. He raised the top rates and got less and less revenue. Enraged at their greed, he did nothing to create incentive for economic investment.
Clearly, it is frustrating for those who struggle, who have been laid off, who are deeply insecure about their finances, to see others living in luxury. I’m no fan of the rich myself. Frankly, I’m jealous of their cool cars. I have no problem with taking their money but at some point, going after the wealth makers and job creators shoots us all in the foot. Why kill the goose that lays the golden egg?
For point #1, I don't think we see wealth as a fixed amount, I don't think I have less because someone else has more. I see it more as someone decided to pay less so they have more. That is why the millennial generation has less potential for income than their baby boomer parents. Millennial’s will be the first generation in US History unable to obtain the same or higher economic status that their parents obtained. We have vastly improved; the problems liberal see is that mobility gained has started to grow stagnate as we are shrinking the middle class.
ReplyDeletePoint #2, trying telling all of the private contractors that the government does not create jobs. Part of our fiscal problem is all of the pork barrel spending. Also the new deal comes to mind when thinking of a great program that helped the country with jobs. However I would agree that the government should not run the country, we don't need a communist state. The government can help in stimulating the economy, look at the fed, and can help ensure the private sector does not blow the whole market up, like what the private sector did to the housing market. The problem is the balancing act of which jobs should be controlled by the government and which by the private sector. I think that is the moving target that both sides are trying to hit; liberals want more government control and conservatives less. Which is right? Well which one does a better job - which is also another problem because what material do you evaluate success.
#3, they pay taxes, we know this. Otherwise tax shelters like Switzerland and the Cayman Islands would not exist ;)
#4, The rich are richer and the poor and poorer. In 2011 extreme poverty in the United States, meaning households living on less than $2 per day before government benefits, was double 1996 levels at 1.5 million households, including 2.8 million children. This would be roughly 1.2% of the US population in 2011, presuming a mean household size of 2.55 people. In 2011, child poverty reached record high levels, with 16.7 million children living in food insecure households, about 35% more than 2007 levels. In 2009 the number of people who were in poverty was approaching 1960s levels that led to the national War on Poverty. (I can wiki too)
#5, I agree our government is not broke, just not well managed. I don't believe in trickledown economics, or what it was originally called “horse-and-sparrow” theory. While I see legitimate criticism of the liberal Robin Hood method, there is a strong point to our side. Large portions of the rich are focused on greed, which screws over a lot of people. The rich want to have $2 million instead of $1.5 million return on their investments. Problem is a lot of those investments hold my retirement savings, so will I put my money where my mouth is?