Tax the rich, hurt the economy
In a townhall meeting in San Diego in the 1990s, President Clinton famously answered “No” when asked if any nation had ever taxed its way to prosperity.
On the ballot this year, California Gov. Jerry Brown wants California voters to approve higher income taxes and higher sales taxes even as current high rates (including a millionaires tax rate) are driving jobs and businesses out of the state and reducing, not increasing, state revenues.
The Los Angeles Times reported that California’s March tax receipts were 4.2 percent lower than the Governor’s budget estimate. Just over half of the shortfall came from falling corporate tax receipts.
The reality for California government is much worse than reported.
While the March 2012 state revenues were down 4.2 percent from estimates, the March 2012 revenues were down 10.9 percent from March 2011.
And while the March 2012 corporate tax revenues were down 8.2 percent from the governor’s estimates, March 2012 corporate revenues were down 10.8 percent from March 2011.
California tax revenues are plummeting and Governor Brown’s answer is to raise tax rates even higher.
President Obama is basing his re-election campaign on the “Buffett Rule”, a new federal minimum tax of 30 percent for those Americans making more than $1 million a year.
Obama first justified the Buffett Rule as a way to bring down the deficit.
When his own economists estimated the increased revenue from the new tax at only $46.7 billion over 10 years (11 and a half days of deficit spending over 10 years), Obama shifted the rationale to “fairness”.
Fairness? The average actual federal tax rate paid by the middle 20 percent of American taxpayers after all allowable deductions is 15.9 percent. The Internal Revenue Service reports that the wealthiest 400 American tax filers paid 18.1 percent last year.
The Buffet Rule is really the Romney Rule–a variant of Obama’s ongoing campaign theme to marginalize Romney as Gordon Gecko in the movie “Wall Street”.
Obama is replaying the 1940 campaign that saw FDR elected to an unprecedented third term by successfully labeling his Republican opponent, Wendell Wilkie, as a “Wall Street lawyer”.
Last year Romney paid 14 percent on income of $21.1 million. A lot more tax than his secretary.
Taken together with the 20 new taxes in ObamaCare and Obama’s determination to allow the Bush tax cuts to expire at the end of this year, economists now estimate that taxes on all Americans will go up by $5 Trillion over the next 10 years.
ObamaCare’s taxes and mandates are now so unpopular that even the skewed Washington Post/ABC News poll couldn’t hide the fact that a significant majority of Americans reject ObamaCare.
In California, we are already living the nightmare of Obama’s second term.
High taxes and a growing state deficit, an insane web of regulations, permanent high unemployment, a declining standard of living, a death spiral in public services, a government of, by, and for public employee unions, crony capitalism, and a policy agenda driven by extreme left environmentalism bent on the de-industrialization of the state.
California is dying from “fairness”.
The Occupy crazies hate the rich, might even want to “eat the rich” as their signs frequently say. But most Americans don’t hate the rich, they want to be rich.
Even the hyphenated Americans so beloved by the Left want opportunity, not higher taxes.
In a poll of Hispanics in the U.S., conducted by the America Libre Institute, solid majorities found it harder to start a business in the U.S. today than four years ago, thought that opportunities for their children would be less than they found in this country, and thought that the country was going in the wrong direction.
Nonetheless, a majority in the same poll still supported Obama’s re-election. Where’s the Romney Hispanic Opportunity Campaign?
Obama actually believes that taxing the rich will grow the American economy; that government “investments in education, research and health care” will put the recession behind us.
He’s wrong, California’s experience proves him wrong.
The choice in November is whether American voters think it is “fair” to work more for the government or more for themselves and their families.