Why taxing the rich won't fix the economy

Chris Wodke

http://www.summittrainingpublications.com/

President Obama has been talking for months about taxing the rich and siding with Occupy protestors.  Last year Wisconsin Congressman Paul Ryan (R ) proposed a path to balance the federal budget in his recently  “Path to Prosperity”. Taxing the rich is nice populist rhetoric designed to get votes.  It sounds so good to make the evil rich cough up more of their ill gotten gains. 

The problem is there aren’t enough rich and they don’t have enough money to solve our current deficit problems (currently $14 Trillion).  According to the Internal Revenue Service and reported in the Wall Street Journal, the entire taxable income of everyone earning over $100,000 in 2008 was about $1.58 Trillion.  If these “evil” rich were to give 100% of their income it would not cover even one year of the deficits President Obama is running.

A study reported in Investors Business Daily shows why there is not enough money to solve our problems:

• $2.1 trillion in taxes was collected in 2008 from those making over $200,000.
• If the tax rate is raised back to that in the Clinton era of 39.6 percent from 35 percent and the capitol gains set back to 20 percent this would have gotten $50 billion in taxes.

This does not give us the income needed to fix the budget problems. We have to stop spending so much. We have an unfair system. Not because the rich don’t pay enough, but because many Americans pay nothing:

• Wage earners in the bottom half of income pay nothing.
• The top 1 percent of wage earners pay 40 percent of the taxes.

Much of the revenue from these top earners is due to capitol gains and bonuses. These rise and fall with the business cycle. When we are in a recession, this source of income drops dramticallly.

Taxing the rich has failed before. FDR  Under FDR tax rates on the highest income earners rose to 90%.   Those with money stopped taking the risk of investing if 90 percent was going to the government.

During his term unemployment never fell below 20 percent

The onset of World War II was able to pull the country out of the depression. Despite massive spending by Roosevelt unemployment increased. All of his spending took jobs from the private sector and transferred them to the public sector in the form of WPA jobs.

The policies of Roosevelt prolonged the depression by 7 years according to UCLA economists. Researchers Harold L Cole and Lee E Ohanian found that government can mess up a recovery with its policies They blame the National RIndustiral Recovery Act.  The Act raised wages and process resulting in higher unemployment. They estimate without the act the depression would have ended on its own in 1936 instead of 1943.

We have learned in Wisconsin the value of reducing spending. Walkers budget repair bill and budget w reduced the cost of government.  Local governments are providing service without raising taxes. Federal government needs to do the same. Because every dollar taken out of the private sector means jobs lost.

Do you hate to write training programs? Too much work to do and no time to put together your training program? Asked to deliver training or a presentation and have no idea where to start?

Let Summit Training Publications take care of your program design needs with our off the shelf training in a box or one of our presentation modules.

Our off the shelf training solutions provide:

• PowerPoint Presentation
• Instructor Guide & handouts
• Student Guide
• Quiz
• Feedback Form

Subject areas include; Communication Skills, Employee Development, Human Resources, Quality, Product Safety, Safety and Supervisor Training.

Titles: Product Safety and Liability, Aftermarket Product Safety,Hazard Analysis, Product Safety Meetings, Warnings, Instructions and Manuals, Product Liability European Union, Obtaining the CE Mark, Risk Assessment, European Union, Product Safety Management Product Safety Audit, Workplace Violence, Substance Abuse, Sexual Harassment, Manager as Coach, Hiring, Firing, Performance Appraisals, Diversity, Americans With Disabilities, Business Etiquette, Security Abroad, International Business Manners, Customer Service, Customer Communication, Terrific Teams, The Manager as Trainer, Coping With Difficult People, Managing Your Boss- Problem Bosses, Malcolm Baldridge Award, Presentations/Public Speaking, Discrimination, Listening Skills, Negotiation, Conflict Resolution, Alternative Dispute Resolution, Total Quality Management, Motivation, High Achievers, Time Management, ISO 9000 Introduction, ISO 9000 Implementation, Quality Audit, Introduction to the Internet, Stress Management, Telecommuting, Flexible Work Schedules, Creativity and Innovation, Benchmarking, Effective Business Writing, Customer Letters, Motivating Self and Others, Project Management, Managing Multiple Projects, Brainstorming, PERT Diagrams, Train the Trainer, Train the Trainer-Delivery, Train the Trainer-Writing Presentations, Train the Trainer-On the Job Training, Train the Trainer-Using Visual Aids, Project Management, Peer to Peer Feedback, Surviving Unemployment, Interview Preparation