Posted by
Member of the Tribe on Monday, November 10, 2008 11:00:02 AM
I was contacted offline in response to Racist politics and why African Americans vote Democrat
urging me to give our president elect a chance, because we should
distribute the wealth in the "other direction;" i.e. away from "wall
Street" and "the rich."
In my response, I have made an effort to separate fact from opinion
I agree that Obama should be given a chance; he is our president and if he
succeeds, we all succeed. By "succeed," I am referring to the most of
the post-nomination reversals he campaigned on in the fall (see A Marketing Triumph and other silver linings in the 2008 presidential election
below), with the important exception of his proposed tax increases on
"the rich," i.e., those earning in excess of $250,000, or $200,000, or
$150,000, or $42,000 or whatever it has fallen to this week.
I don't agree with the (quite understandable)
sentiment that Obama be given "as much respect as the Democrats showed
Bush." Calling Obama a Nazi and unfavorably comparing his policies to
the rape rooms, human paper shredders, torture chambers and mass
executions of Saddam Hussein, to cite a couple of examples, would make
us no better than Air [Anti-] America, Frank Rich, Maureen Dowd, and,
well, OK most of the mainstream media and Hollywood.
Now from opinion to fact.
It is factually incorrect to assert that any transfer of wealth has
occurred from poor to rich, or from "main street" to "Wall Street."
Businesses create wealth (corollary: government doesn't), which is
redistributed to the poor and middle class in five ways:
- job creation (salaries, which provide the opportunity for #2)
- investment in the equity of those businesses
- our "progressive" taxes on those businesses
- our "progressive" taxes on owners of those businesses
- redistribution of the proceeds of those taxes to the poor and,
secondarily, to the middle class
Liberal critics of McCain's "Joe the Plumber" strategy (if you could
call anything in his pathetic campaign a "strategy") charged that
McCain was scaremongering because our system is already redistributive
in favor of the poor. They were 100% correct as to redistribution. How
much redistribution is ideal (or whether it was "scaremongering") is a
matter of opinion.
Factually, Obama's repeated references to "tax giveaways to the rich"
do not jibe with reality. There has not in fact been one penny of "tax
giveaways to the rich." They would be more accurately referred to as
tax relief for the rich, since the money at issue was earned
by them in the first place. The question is: how much of these earnings should the
government be entitled to confiscate. That is a legitimate matter of
opinion on which we can all argue, but to put the argument in proper
perspective, let's return to the facts.
Factually speaking "the rich" pay virtually all of the taxes. The top
1% of earners account for 40% of all revenues, up from 20% just 20
years ago. The top 10% of earners account for 70% of all revenues. The
bottom 40% account for (read this twice) zero - zip - nada. They
account for almost half of the 95% of whom Obama wants to provide "tax
relief" (mainstream media - you would make George Orwell proud)!
How can this be? Consider what the Bush and Reagan tax rate reductions had in common.
They resulted in the largest revenue increases in history! Tax
rate reduction results in wealth creation, resulting in more revenue (i.e., not despite the lower tax rates but because of them). Since we have progressive tax rates, who do
you think accounted for all those increased revenues? The poor?
It's worth digesting this: "the rich" paid more taxes under Bush than
under Clinton. They also accounted for a greater proportion of those
taxes. And all this despite Bush's "tax giveaways to the rich."
Again, factually speaking, there is no way to provide any significant
"across the board" tax relief without disproportionately benefiting
"the rich." They are the ones who, for all practical purposes, pay all
the taxes in the first place.
So the phrase "tax giveaways to the rich" fundamentally runs counter to reality on
two levels, because the policies referred to:
- affected how much the rich were giving away to everyone else,
not vice versa
- increased the amount the rich were giving away to everyone
else
As to my opinion: no matter how much opportunity we create, the poor
will always be with us. Policies that reward individual effort (i.e.
low taxes and regulation) must always be balanced with compassion
(redistribution). The perfect place on the dial will always be a matter
of debate and may objectively shift from time to time.
We do know that twisting the redistribution dial too far fails on three
levels, by:
- destroying the very wealth creation that offers the only long
term hope of helping the disadvantaged
- creating and perpetuating a cycle of dependence and poverty (see Racist politics below)
- concentrating too much power in government, which has never, not once, not even a little bit, resulted in anything anyone (with the possible exception of Planned Parenthood) would call "good"
Finally, we should become very concerned when the siren song of class warfare
is
chanted so stridently. This is the same state-as-provider-of-all,
scapegoating ("fat cats" "Wall Street" "bankers" stealing the sweat of
the workers) we've heard before in 1917 Russia, 1924 Italy and 1934
Germany. The dreams of a greater society paid for by "contributions"
from the "controllers of capital" never seem to work out very well for
Jews, or, for that matter, anyone else