Sunday, November 23, 2014

Poor and MIddle Class Americans Need Less Government "Help"

Winston Churchill said this about income inequality and the profound differences between capitalist and socialist systems of governance:  "The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of Socialism is the equal sharing of miseries."

The opportunity to achieve high standards of living that we desire for all Americans is a purposeful and wonderful pursuit, but the means chosen to achieve those earned results are even more important. While we may wish that every American (especially the poor and middle class) will come to enjoy prosperity in his or her personal life, how we each individually and as a nation choose to go about accomplishing that is of critical importance.

The sad reality today is that real inflation adjusted wages have been flat lining or even declining for the past several years, the U.S. economy continues to muddle along, and the poor and middle classes are suffering.

But why is that happening in America and, even more important, what can each and all of us do about it? In my opinion, the obvious answer is that the government's playbook needs to change.

Winston Churchill also said this, "A fanatic is one who cannot change his mind and won't change the subject." And this, "Socialism is a philosophy of failure, the creed of ignorance and the gospel of envy."

We should listen carefully to those words of wisdom from Sir Winston, and so should President Obama and his team of do-gooders. Now let's review some facts.

More Redistribution, Less Income is subtitled 'Obama has spread the wealth, but the poor and middle class haven't benefited' has this to say:

"One reading of the midterm election wave is that voters have concluded that President Obama’s answer to falling incomes and slow growth—higher taxes on the rich and more redistribution—is tapped out. These policies have been up and running for six long years but the middle class is no better off as a result.

On taxes, Mr. Obama often claims that the rich don’t pay their “fair share,” yet the most affluent one-fifth of taxpayers on average supplied 68.7% of federal revenue for 2011. That’s according to the Congressional Budget Office . . . .

As for the top 1%, they funded 24% of everything the government does in 2011. The CBO also estimates that the end-of-2012 fiscal cliff deal that lifted the top marginal income tax rate to 39.6%, plus ObamaCare’s taxes on high-income individuals, increased their average federal taxes by 4.3 percentage points to 33.3% of income. The Warren Buffett minimum-tax rule asserted that no millionaire should pay an effective tax below 30%. Mission accomplished.

. . . but the bigger news in the CBO numbers is that wealth is being spread with little to show for it. According to the CBO, the lowest 60% of earners all collect more in benefits on average than they remit to the Treasury. Yet even the supposed beneficiaries of Mr. Obama’s policies ended up with less in 2011 than 2007. . . .

Liberals will respond that at least redistribution reduced after-tax income inequality, though that abstract achievement is little comfort to the people with less actual income at their disposal. Recall Mr. Obama’s comments as a primary candidate at a 2008 debate that he favored higher taxes in the name of equity, never mind the consequences for revenue or the economy. Well, he got that . . . .

The main lesson in these statistics is not about dependence on government. Rather, it is a verdict on Obamanomics. Presidents who put reducing inequality above increasing prosperity end up with less growth and opportunity that benefits everyone, and thus with more inequality.

There’s also a lesson about the exhaustion of the liberal tax agenda. As a matter of arithmetic in a tax system as tilted toward the high end as America’s, the rich aren’t nearly rich enough to finance progressive ambitions. . . .

Our guess is that most Americans would prefer to exit this tax-and-redistribute treadmill and simply earn more market income."

Summing Up

Facts are stubborn things.

That's my take.

Thanks. Bob.

No comments:

Post a Comment