If I were to give President Obama credit for anything, I'd have to give him credit for being persistent. In a budget proposal he will propose today he still clings to this idea that taxing the rich is the way to go in order to get this economy moving forward at a faster pace. At the same time he says he wants to create jobs. But in that it's clear he doesn't understand the workings of the economy, and he is blind as a bat when it comes to history.
Raising taxes has never led to more revenues for the government's coiffures, and so far as I can tell, it has never led to job creation either. People, of course, like to point out that President Bush lowered taxes and look where it got us. But the fact of the matter is that it wasn't Bush's tax cuts that got us into the Great Recession, it was many years of failed policy by the Congress and bad decision making by the banks that did us in. And I've argued that it was also caused by a false sense of security and wealth by many Americans fueled by a saturated, and overdone credit market, and a generation of people that had access to too much too soon thinking that the gravy train would just keep delivering the goods—a huge trade deficit and loss of manufacturing didn't help either, but that's for another day.
I have always held that a tax on the rich is a tax on the regular folks. Sure, it feels good for the little guy to think he's getting one over on the "fat cats" when they get stuck with the possibility of giving up more of their riches. But the reality is that all that happens when the rich get stuck is to pass on their costs—to you and I.
Take the fact that I own a duplex that I rent out. As a part of the deal I pay for the heat. In the tenant's eyes they are getting their heat for free. So taking that thinking into account, let's say that the heat I pay for is a tax I have to pay. The tenants can certainly, if they want to stick me with higher costs, turn up the heat if they want to. But the end result is simply that if my costs go up to run the duplex, I will invariably raise the rent to the tenant.
Who pays for the heat? They do.
And just like raising the cost of the heat I provide to my tenants ultimately raises the cost of their rent, so does raising taxes on the rich. As a result of higher taxes the rich and the corporations will simply reduce hiring, reduce benefits, raise the cost of the goods and services they sell in the marketplace, or they will simply pack their bags and open offices and factories in places where costs, and taxes are lower.
Oil is a very good example of this effect. Airlines have been adding fees to try to make up for higher fuel costs all the time.
There is only one good thing about the fact that Obama wants to continue forward with this disastrous idea, and that is that it will, like most of his policies have, fail miserably. The American people are watching. The smart ones get it. And contrary to popular belief, there are smart people on the left, and they get it too. This will solidify the need to oust this guy from office and put someone else in his place who understands the economy, understands the path to economic growth, and who also understands why we are having such a difficult time coming out of this last deep recession and onto a path of more rapid growth—something that historically happens when we hit bad economic times—and that is that it is President Obama's policies which are largely to blame for keeping us running in place.
By the way, might I only close by asking the question, "What's that they say about the definition of insanity?" His budget proposal is more of the same. There's nothing new about it. The outcome will present more of the same as well, however unfortunate that reality may be.
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