There has been a lot of commentary on the Right since last week’s disaster some of it useful, and some not so useful. Some of it, I have to say, is just a little bit, well, dumb. Among the latter is this proposal I read at conservativebyte.com, that only those who pay taxes should be allowed to vote.
Our republic, in its current form, cannot continue forever. The old adage that once the peasants learn that they can vote themselves bread is rapidly proving itself to be true. Any but a fool can see that no government can continually spend more than it takes in can last. We can see it… the fools can’t. The point is that we must desperately attempt to educate them before they run the entire American experiment into the ground. Otherwise we will go the way of Greece, into insolvency, massive inflation and turmoil.
Whenever enlightened people gain control of our government or in the next republic, if it comes to that, the vote must be restricted to those who pay taxes (which will be most people) and the government should be required to balance its budget except in time of declared war. The idea that all men are created equal and should therefore be able to vote is baloney. All men should be treated fairly and with compassion, but only those who pay some amount of tax, regardless how small, actually have some skin in the game and should be able to decide how much they are willing to spend.
Section 1.The right of citizens of the United States to vote in any primary or other election for President or Vice President, for electors for President or Vice President, or for Senator or Representative in Congress, shall not be denied or abridged by the United States or any State by reason of failure to pay any poll tax or other tax.Section 2. The Congress shall have power to enforce this article by appropriate legislation.
The right to vote does not depend on the ability to pay a tax. Maybe it should, but that is beside the point. There is no way that the twenty-fourth amendment will be repealed and no way that any means-testing for voting will be permitted. It does not seem to me that discussing disenfranchising large segments of the voting public is a way to win votes.
I would like to take issue with the statement that only those who have “skin in the game” should have a say. It seems to be a common belief that only about 50% of the citizens of the US currently pay taxes. This is true, if you only consider the federal income tax, but that is not the only tax that people in the US pay. There are also Social Security and Medicare payroll taxes. There are state and local income taxes. There are sales taxes and excise taxes, and more. I doubt there is anyone in this country who doesn’t pay any taxes at all. Granted, many people are unaware of just how much they actually pay, but that is a matter for education. The point I want to make is that if the right to vote is restricted to those who pay some form of tax, than the right to vote cannot be restricted at all.
And, anyway, every citizen of the United States does have some skin in the game, whether they pay taxes or not. If the economy collapses because people are voting themselves goodies out of the treasury, than everyone is affected, rich or poor. Let’s try to come with with sensible ways to solve our country’s problems and not waste time on nonsense like this.
Here is an interesting idea on how to decrease the deficit, raise taxes on Hollywood. This seems appropriate since entertainers are always talking about the need to make the 1% pay their fair share. Since many actors are part of the 1% it’s only fair that they pay more, right? No doubt they will be happy to do so.
Today, Hollywood is a playground for Democratic fundraisers and Obama has found that Hollywood remains loyal to his vision and re-election. While those on Wall Street are having second thought about the guy they helped put in the White House, there are no second thoughts among Hollywood elites.
Instapundit Glen Reynolds made the suggestion that if we are going to raise taxes to cut the deficits, why not start with a 20% excise tax on the film industry? Since many of these Hollywood stars and producers are forever telling us how we need tax increases to help close the deficits, why not let Hollywood lead the way? The tax, which was imposed on the gross income and not the net, took a 20% hit off any Hollywood bottom line and can you imagine how much a major star can contribute with a 20% tax on a gross income on one of those 10 to 20 million dollar salaries for a single movie?
Let face it, much of Hollywood may talk of the down trodden, but the reality is Hollywood is the home of the 1%. So if the Hollywood 1% are going to help elect the most leftist President, then let them lead by sacrificing the first 20% of their gross income!. As Glen Reynolds argued, tax the Hollywood 1%. Or at least let them squirm. Who knows, maybe George Lucas or Steven Spielberg might just produce their own film defending supply side economics if they are faced with the idea that the first 20% of their income will go to the government even before they even cash that big eight or nine figure check!
Well, Jon Lovitzcriticized Obama over his plans to raise taxes on the rich. He is even not so sure he is a Liberal. Maybe an excise tax might turn some of the people in Hollywood into Conservatives, or at least Libertarians.
President Obama had some interesting things to say on his weekly radio and internet address. The transcript can be found here at whitehouse.gov.
But right now, that’s not the case. Instead of doing what’s right for middle class families and small business owners, Republicans in Congress are holding these tax cuts hostage until we extend tax cuts for the wealthiest Americans.
You see, Republicans in Congress and their nominee for President believe that the best way to create prosperity in America is to let it trickle down from the top. They believe that if our country spends trillions more on tax cuts for the wealthy, we’ll somehow create jobs – even if we have to pay for it by gutting things like education and training and by raising middle-class taxes.
I guess President Obama’s idea on how to grow the economy is to take more money from the people who create the jobs and give it to the government to spend on stimulus projects that reward his supporters. No wonder the economy is heading back in to a recession.
But note that tax cuts are considered to be spending more. It is as if Obama believes that the government owns everything and any income left over after taxes is a gift. Well, that is not too surprising. I think that politicians of both parties believe that.
They’re wrong. And I know they’re wrong because we already tried it that way for most of the last decade. It didn’t work. We’re still paying for trillions of dollars in tax cuts that benefitted the wealthiest Americans more than anyone else; tax cuts that didn’t lead to the middle class jobs or higher wages we were promised and that helped take us from record surpluses to record deficits.
He has a lot of nerve talking about record deficits. I will concede the Republicans were responsible for a good portion of the deficits during the Bush years, but this was more the result of their abandoning their principles and going on a wild spending spree than the tax cuts. But Bush’s deficits are dwarfed by Obama’s.
And if Obama really wants the economy to grow and more jobs to be created, than maybe he should stop disparaging the people who can make it happen.
Would you please raise my taxes?” Edwards asked, a request that drew applause from the audience. “I would like very much to have the country to continue to invest in things like Pell Grants and infrastructure, and job training programs to make it possible for me to get to where I am. And it chills me to see Congress not supporting the expiration of tax cuts that have been benefiting so many of us for so long.”
California Retailers Association stated: “We thank Governor Jerry Brown and the leaders in the California State Legislature who have demonstrated their leadership and commitment to California businesses by passing and signing e-fairness into law. Small and large businesses across the state have been held at a major disadvantage by the current law that out-of-state online companies like Amazon.com and Overstock.com have exploited for years. This has cost us jobs and revenues.”
So, how is it working out? Well, it would seem that Amazon.com has decided to end its affiliate advertising program with over 25,000 California websites. In their e-mail, Amazon.com explained why this was necessary.
(The bill) specifically imposes the collection of taxes from consumers on sales by online retailers – including but not limited to those referred by California-based marketing affiliates like you – even if those retailers have no physical presence in the state.
We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action.
Oh, well. It would seem that the state of California will not be seeing $200 million in revenue coming in. I wish that politicians would get it into their heads that people will try to avoid taxation.
In the early 1920s the highest tax rate was 73%. In 1921 President Harding appointed Andrew Mellon to be Secretary of the Treasury. Over the next eight years he reduced the top rate to 24%. The result, federal revenue increased from $700 million to over $1 billion. Every year that decade the federal government ran a surplus, hard to believe I know. Unemployment and inflation were at record lows.
It may seem counter-intuitive that lowering tax rates would increase revenue but it is actually easy to understand. In general, people do not like paying taxes. They will often go out of their way to avoid paying taxes by exploiting any loopholes in tax codes, decreasing any activity that is taxed, consuming less of any commodity, or just plain cheating. If tax rates are relatively low, it is not worth the trouble and people go ahead and pay their taxes. If tax rates are relatively high, then people start putting their money in tax shelters.In other words, people don’t just sit still and allow themselves to be taxed. They take action to limit their tax burden as much as possible.
The reason I mention all of this is that there seems to be a movement among the Democrats to raise taxes in order to lower the deficit. They believe that the reason that we are in the fiscal mess we are in is because people, especially the greedy rich, just do not pay enough in taxes. The problem is that raising taxes simply will not produce the bonanza of increased revenue that they expect. Raise taxes on the wealthy and they will send their money abroad, or not invest, or do what it takes to pay as little as they can. I know I am being repetitive, but I cannot seem to pound that concept into Progressives’ heads.
In any event, revenue to the federal government as a percentage of GDP seems to hover at about 19%, regardless of tax rates as shown here and here. And check out this chart here. The US has the honor of having the second highest corporate tax rate in the developed world, 13% higher than the OECD average. This is not exactly helping our recovery.
I have been meaning to write a post on why taxing the rich will not get us out of the fiscal mess we are in. Fortunately Alan Reynolds has done the work for me in a piece in the Wall Street Journal. The interesting thing is that no matter what the actual tax rates are, the amount of revenue that the government receives remains about the same, as you can see in this chart.
Or as Alan Reynolds writes;
All this nostalgia about the good old days of 70% tax rates makes it sound as though only the highest incomes would face higher tax rates. In reality, there were a dozen tax rates between 48% and 70% during the 1970s. Moreover—and this is what Mr. Reich and his friends always fail to mention—the individual income tax actually brought in less revenue when the highest tax rate was 70% to 91% than it did when the highest tax rate was 28%.
There is more worth reading. If I get the time, I should see if I can find the actual government revenue over the years, in dollars adjusted for inflation and compare it to tax rates.
In any event, it should be obvious, but somehow it isn’t, that the problem is not that we are not taxed enough, it is that the government spends too much.