Some people have breathed a sigh of relief, after the recent “fiscal cliff” agreement was reached. “Oh, they only raised taxes on the richest people and it won’t hurt me” is the common retort from those who believe this is “over”. Well, it’s no where near over. The Left will always want to raise taxes. They believe the bigger the government the better. For them, it has nothing to do with reducing the deficit, it has to do with increasing government spending, even more.
First, let me put to rest the thought that “only the rich” had their taxes increased. The agreement included, a rise in the payroll tax for Social Security, from 4.2% to 6.2%. That is a very real tax increase for all those who work. We are told, that the increase was only supposed to be “temporary”, so this was just “allowing” the rate to go back to “normal”. Tell that to the people who will see their paychecks go lower this week. In reality, any tax rate hike, or cut, is permanent until changed. Inaction is still acceptance of an increase. Otherwise, Congress just uses this type of set up, to be able to claim they stood for “principle” without even voting on it. They must take responsibility for their action and inaction.
But back to the real issue. The Left win never, ever be satisfied with current taxes. They will always want more money to spend.
On CBS’s Face the Nation program Sunday, the Democrats’ leader in the House, Nancy Pelosi (D-CA), left the door wide open for even higher taxes. When asked about even higher taxes on the “rich” she replied “I’m saying that’s not off the table”.
In an article a few months ago, Left Wing “economist” Paul Krugman, wrote in his New York Times article, that we could go back to the tax rates of the “50′s”, and be very prosperous. He praises a return to the time when we had a high tax rate of 91%.
Yet in the 1950s incomes in the top bracket faced a marginal tax rate of 91, that’s right, 91 percent, while taxes on corporate profits were twice as large, relative to national income, as in recent years. The best estimates suggest that circa 1960 the top 0.01 percent of Americans paid an effective federal tax rate of more than 70 percent, twice what they pay today.
So, does that sound like Mr Krugman and his Left Wing friends will be satisfied by a federal top income tax rate of a “measly” 40%? Kind of ironic he uses the “twinkie” as a metaphor, when they are closing up Hostess due to their unions and this economy.
Obviously, Mr Krugman plays fast and loose with the facts here. He makes no mention of the labor force post World War 2. It was reduced by the men killed during the war. We also had a long period of pent up demand, that was just waiting to be spent when the economy got better. So, the growth in the 50′s was due to a lot of different factors, that Mr Krugman conveniently fails to mention.
Last year I wrote an article on Taxes “Increasing Taxes will Hurt the Economy”:
I won’t recount the whole article here, but invite you click it and to read it. Now, my main purpose, or objective, was to lay out the fact, that taxes affect people’s behavior.
Increasing taxes and government spending may increase government activity, but it reduces Domestic economic activity, which is where most jobs are created.
Really what we need are tax cuts, but at the very least the House Republicans must stand their ground on any new taxes. The Left never gets tired of spending money and increasing taxes. You can bet, it won’t take long for President Obama to declare, that recent tax increases “Are not enough”, and begin to push for even higher taxes.
Even higher taxes would be a disaster for this economy. Time to stop the out of control government spending and stand our ground on taxes. We will be watching.