[Vision2020] Spreading the Wealth and Killing the Goose

[No Weatherman]

Let me guess.

You majored in economics.


On Fri, Oct 31, 2008 at 4:27 PM, Donovan Arnold
<donovanjarnold2005 at yahoo.com> wrote:
> Instead of taxing the rich that benefit most from government resources, We
> should instead take money from the poor and homeless?
>
> Best Regards,
>
> Donovan
>
> --- On Fri, 10/31/08, No Weatherman <no.weatherman at gmail.com> wrote:
>
> From: No Weatherman <no.weatherman at gmail.com>
> Subject: [Vision2020] Spreading the Wealth and Killing the Goose
> To: "Vision 2020" <vision2020 at moscow.com>
> Date: Friday, October 31, 2008, 7:54 AM
>
> Spreading the Wealth and Killing the Goose
> By Gregory V. Helvering
>
> Larry King: Concerning spreading the wealth, isn't the graduated
> income tax spreading the wealth? . . . .
>
> Senator McCain: Well, that's spreading the wealth in the respect that
> we do have a graduated income tax. That's a far cry from taking from
> one group of Americans and giving to another. I mean, that's
> dramatically different. — "Larry King Live," October 29, 2008
>
> John McCain put his finger on an important point: we currently have an
> extraordinarily progressive income tax, which requires the wealthy
> (and the relatively wealthy) to bear virtually the entire burden of
> the income tax. Obama wants to spread the wealth not because the
> wealthy do not currently bear their fair share of supporting the
> government. He wants to spread the wealth because he views the wealth
> itself as unfair.
>
> According to the latest IRS statistics, released this summer, we have
> an extremely progressive income tax system. For 2006 (the latest year
> for which statistics are available), the share of the federal income
> tax paid by the top 1 percent of tax returns reached an all-time high
> — 40% of all federal income taxes. The top 50% paid 97% of the tax.
> The bottom 50% paid only 3% of it.
>
> In addition, there were 43 million tax returns filed by people who had
> gross income but who — after deductions, exemptions and credits — had
> no tax liability at all. Many of these people got free money from the
> federal government, via "refundable credits" such as the Earned
> Income
> Tax Credit. They got "refunds" even though they did not pay any
> income
> tax in the first place.
>
> Even more importantly, the statistics demonstrated that the Bush tax
> cuts actually increased the share of taxes paid by the "rich"
> (however
> they are defined). In 2000 (the last year of the Clinton
> administration), the top 1% paid 37% of the federal income tax; by
> 2006, the figure was 40%. In 2000, the top 25% paid 84% of the tax —
> by 2006 it had increased to 86%. In 2000, the bottom 50% paid 4% — in
> 2006 the percentage had dropped to 3% (a 25% drop in the relative tax
> burden on the lower half of the country).
>
> So after the Bush tax cuts the burden the "rich" bear is
> significantly
> up and the burden on the rest of society is dramatically down. That's
> great news, right?
>
> Well, no — not if your goal is "redistributive change" (and if you
> don't think the courts, shackled as they are by their
> "interpretation"
> of the rights in the Constitution, can do it for you). If the change
> you believe in is "redistributive change," increasing the burden of
> government borne by the rich is nice, but it does not get you where
> you really want to go.
>
> Robin Hood was not upset at the relative costs among the citizenry of
> supporting the Sheriff of Nottingham. He did not think the rich should
> bear a greater burden in helping the Sheriff create an ordered
> society. He wanted the money for his chosen beneficiaries, not for the
> government. He didn't want tax increases on the rich; he wanted their
> income.
>
> For progressives, the above IRS statistics simply prove that, under
> the Bush tax cuts (which were across the board to all taxpayers), the
> "rich" made more money (since they were allowed to keep more of it
> and
> invest it, which produced even more income for them). The "rich" thus
> paid more taxes, and bore a greater burden of financing government,
> but for progressives, the Bush tax cuts have to be rescinded even if
> they demonstrably shifted more of the tax burden to the rich.
>
> For progressives, the goal is not ultimately to create more tax
> revenue for the government, but to equalize the income of the
> citizenry. So increased taxes from the rich are not a solution if they
> mean the rich made more money compared to others. In fact, even if the
> tax cuts end up making the tax system more progressive, that simply
> exacerbates the problem: the "gap" between rich and poor.
>
> That is why Obama had this exchange earlier this year with Charlie
> Gibson about increasing the capital gains tax rate:
>
> GIBSON: . . . [You] said you would favor an increase in the capital
> gains tax. As a matter of fact, you said on CNBC, and I quote, "I
> certainly would not go above what existed under Bill Clinton," which
> was 28 percent. It's now 15 percent. That's almost a doubling, if you
> went to 28 percent.
>
> But actually, Bill Clinton, in 1997, signed legislation that dropped
> the capital gains tax to 20 percent.
>
> OBAMA: Right.
>
> GIBSON: And George Bush has taken it down to 15 percent.
>
> OBAMA: Right.
>
> GIBSON: And in each instance, when the rate dropped, revenues from the
> tax increased; the government took in more money. And in the 1980s,
> when the tax was increased to 28 percent, the revenues went down.
>
> So why raise it at all, especially given the fact that 100 million
> people in this country own stock and would be affected?
>
> OBAMA: Well, Charlie, what I've said is that I would look at raising
> the capital gains tax for purposes of fairness. . . .
>
> We saw an article today which showed that the top 50 hedge fund
> managers made $29 billion last year - $29 billion for 50 individuals.
> And part of what has happened is that those who are able to work the
> stock market and amass huge fortunes on capital gains are paying a
> lower tax rate than their secretaries. That's not fair.
>
> And what I want is not oppressive taxation. I want businesses to
> thrive, and I want people to be rewarded for their success. But what I
> also want to make sure is that our tax system is fair and that [blah,
> blah, blah for another 155 words].
>
> GIBSON: But history shows that when you drop the capital gains tax,
> the revenues go up.
>
> OBAMA: Well, that might happen, or it might not. It depends on what's
> happening on Wall Street and how business is going. . . . [Emphasis
> added].
>
> Obama does not appreciate the fact that tax incentives for investment
> and business expansion have a direct effect on "what's happening on
> Wall Street and how business is going." One does not simply increase
> the tax on capital gains, and on investors, and assume that the same
> amount of investment and capital gains will still occur.
>
> Obama believes the main thing is to make the capital gains tax
> "fair,"
> regardless of what history shows about the relationship between rates
> and revenue. He does not appreciate that tax incentives for investing
> increases the amount of investing, which in turn expands business,
> creates more jobs and produces more income — and thus more tax.
>
> The JFK tax cuts proved it; the Reagan tax cuts proved it; the capital
> gains tax cut that a Republican Congress forced on Bill Clinton proved
> it; and the Bush tax cuts proved it again. It is not a theoretical
> argument. The latest cold, dry IRS statistics demonstrate it once
> again.
>
> If Obama is elected next week, we will all be treated to another
> history lesson about why societies that sought "fairness" by taking
> massive amounts of money from one part of society to give to another
> (not simply to fulfill a governmental duty of providing a safety net,
> but for the affirmative purpose of "redistributive change"), not only
> did not create "fairness," but in fact made matters significantly
> worse for everyone.
>
> Gregory V. Helvering is the pseudonym of a tax lawyer who has been
> practicing for more than 30 years.
> http://www.americanthinker.com/2008/10/spreading_the_wealth_and_killi.html
>
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