Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.
This is known as “bad luck”. — [Quiz: who wrote this?]
The way some politicians seemingly want us to despise, condemn, and oppose the minority called “the rich”, our country is in for more “bad luck”. If they get their way and raise taxes on the “1%”, that won’t help the rest of us in the slightest. Hurting someone else does not help me. To the contrary, taxing the rich will very likely backfire, hurting the middle and lower classes, while collecting less revenue than expected from the upper class.
In 1990 the politicians sought to make “the rich pay their fair share” by imposing a luxury tax on yachts, private airplanes, expensive autos – things that only the rich could afford to buy. They calculated the tax would bring in $31 million per year. The actual result was to destroy the boat building industry and put tens of thousands of blue-collar boat builders out of work.
In the first year of the luxury tax, one builder cut its workforce from 1400 employees down to 68; another from 350 down to 50. A third went from 200 employees down to 5. All told 25,000 jobs were lost among boat builders and another 75,000 in industries that supplied the boat builders. Instead of earning money from “the rich”, the government paid out $24 million in unemployment benefits and lost income tax. A Congressional committee estimated that the value of jobs lost in the first six months was $159 million.
After two years of utter failure that slammed the middle class, the politicians finally repealed the “luxury tax”. The long-term consequence is that many boat building jobs went overseas never to return. The politicians’ idea of “fairness” meant that the rich weren’t hurt at all but the middle class lost their jobs.
In recent years, some states and other countries have similarly tried to make “the rich pay their fair share” by imposing higher income taxes on the rich. Predictably, those plans did not work. Florida, Illinois, Maryland, New York, and Oregon all tried to raise taxes on “the rich”. Also France, Italy, Spain, and the United Kingdom. None collected as much as they expected, some collected less than before the tax, some are repealing their new tax. The taxes on the rich hurt the poor and middle class far more than they hurt the rich.
Obama must know that his tax on “the rich” will fail just as all previous such taxes have failed. He should know that it will backfire and will cost jobs for the poor and middle class. He certainly knows that even if they magically worked for the first time ever, the amount they collected would be but a pittance compared to his gigantic deficit.
By his own words, Obama doesn’t care if his policy hurts the poor and middle class. In a 2008 debate, Obama was asked about his plan to raise the capital gains tax. He was reminded that the last time the tax was raised, it resulted in a decrease of revenue. Conversely, when Bill Clinton lowered the tax, the government actually took in more revenue. So why would Obama raise that tax if it would produce less money for the government? His answer was that he “would raise the tax for purposes of fairness.” He is more interested in the symbolism of raising rates even if the rich actually end up paying less money.
Obama is inflaming passions of envy and hatred against “the rich”. It has nothing to do with collecting more revenue, or of reducing his gigantic deficit. No, it is purely a political calculation. He is trying to focus attention on “the rich” to distract attention from his terrible economy – the worst recovery in 70 years.
While family incomes continue to drop as they have for three straight years, while youth unemployment reaches levels not seen in 70 years, if the Obamacare tax hike causes another recession as some predict, Obama needs to shift attention away from his failed policies to somewhere – anywhere – else.
A scapegoat is needed. Obama is setting up “the rich” to take the blame for the continuing bad economy. If taxes took more money away from the rich, then magically the middle class and the poor would have more money.
Envy and hatred are Obama’s political tools to divide the country so people will blame the rich instead of blaming Obama’s policies.
Instead of trying to bring down the rich, wouldn’t it be better to try to raise the poor? Obama’s policies have done just the opposite. Eight million people have given up trying to find a job. Ten million more families are on food stamps. Seven million more people are below the poverty level.
Meanwhile, Obama’s rich cronies and big campaign donors have made out like bandits. They have received billions in taxpayer dollars. Washington has become the richest area in the country as lobbyists scamper for even more taxpayer money.
All of us, rich and poor alike, would be much better off if Obama would put aside his anti-rich rhetoric and instead adopt pro-middle class policies. To borrow a line from our Libertarian friends: