With its historic warning that America’s AAA credit rating is officially in jeopardy due to our gigantic national debt, Standard & Poor’s brought new urgency to the debate over balancing our budget. President Obama and the Democrats consistently peddle the idea that our budget problems can be resolved by hiking taxes on “the wealthiest Americans,” which they currently define as individuals who make over $200,000 per year.
That’s not true. It’s a lie. It’s the most dangerous lie anyone is telling in America today. If enough people believe it, our ruin is assured.
A lot of data about how much income tax is paid by various groups is reviewed each Tax Day. Here’s the crucial statistic from this year, courtesy of the Wall Street Journal:
“Assume that tax policy confiscated all the taxable income of all the ‘millionaires and billionaires’ Mr. Obama singled out. That yields merely about $938 billion, which is sand on the beach amid the $4 trillion White House budget, a $1.65 trillion deficit, and spending at 25% as a share of the economy, a post-World War II record.
“Say we take it up to the top 10%, or everyone with income over $114,000, including joint filers. That’s five times Mr. Obama’s 2% promise. The IRS data are broken down at $100,000, yet taxing all income above that level throws up only $3.4 trillion. And remember, the top 10% already pay 69% of all total income taxes, while the top 5% pay more than all of the other 95%.”
Remember, the Journal is talking about outright confiscation of all taxable income above the levels they specify. Tax the income of millionaires at 100%, and you’re a little over halfway to closing the budget deficit. Only through the nightmarish tyranny of seizing every dollar about $100,000 earned by every American could we begin paying down the national debt through tax increases… and that’s using the mindless “static” analysis favored by liberals, in which the confiscation of income produces no decrease in economic activity. Why would anyone try to earn over $100,000 per year, if every additional dollar was immediately seized by the government?
You might respond that total confiscation of income is a silly idea, espoused by only hardcore socialists like… Barack Obama’s father, who once wrote that “theoretically, there is nothing that can stop the government from taxing 100% of income, so long as the people get benefits from the government commensurate with their income which is taxed.” What if we leave talk of confiscation behind, and just look at solving our budget problems with tax rate increases?
Fox News reported today on a study from the non-partisan group Public Notice, which “showed that if Washington wanted to hoist tax rates to actually cover spending, the top tier rate would go from 35 to 88 percent; the middle tier from 25 to 63 percent and the lowest from 10 to 25 percent.” That means top income earners would face near-confiscation, while the bulk of the middle class would fork over 63% of its income in federal taxes. That assumes the higher rates are implemented immediately, since federal spending increase perpetually, even when “spending cuts” are under discussion. If you doubt it, ask a Democrat what will happen if we don’t raise the debt ceiling in May.
It’s not an opinion, or political rhetoric. It’s a hard fact. It is mathematically impossible to close our $1.65 trillion budget deficit, let alone pay down the national debt, by raising taxes on people who make over $200,000 per year, even if you pretend that crushing tax rates won’t reduce the amount of taxable income they report.
It is not a “mistake” to say otherwise. It is a lie told by politicians, and a childish delusion held by their followers. It’s baggage we simply cannot afford to carry any more. It was an indulgence flavored with guilt and sanctimony for the wealthy nation we were… and a nightmare that will be imposed by force on the reduced nation we are becoming, as it has been imposed upon all the poor nations of the world. What does it take to confiscate 100% of someone’s income? Believe in Barack Obama, and you will soon find out.
If America is to have any chance at avoiding financial collapse, it is absolutely imperative that we grow up, and abandon the poisonous fantasies of class warfare. No argument that begins with these fantasies is worth hearing.