Monday, September 3, 2012

Obama's Trickle Down

Democrats have consistently mocked Republican tax cutters for at least 30 years all the way back to Ronald Reagan---calling it "Trickle-down Economics."    "Trickle-down" is a derisive term to describe lower marginal tax rates for upper income families--a group which includes the small business creators.  Because the top brackets pay nearly all of the income taxes, they are helped the most by lower rates .    The Left wants to perpetuate the myth that somehow they are not paying their "fare share"which isn't true at all.  (see tax collection data below)

"Trickle-down" worked very well for decades after the Reagan (and Thatcher) tax cuts, but somewhat less well in the Geo.W. Bush administration (jobs were being lost to China).   But it works!  Of course, the term is an attempt to mis-characterize the simple fact that, when it comes to the economy, a rising economy helps everyone.  More plainly said, a rising tide lifts all boats.  Of course that's true.   Yes, the rich got richer but it's because incomes of the top 1% have risen quite sharply--taxes are only somewhat lower.  Note that everyone's taxes have declined (see the table at the bottom).

Obama has his own ideas for trickle-down

The efficacy of "Trickle-down" can be debated by intelligent people, but Obama's "Trickle-down" is a proven loser.

Obama's "Trickle-down" idea is to drastically increase taxes and let the government decide how to spend it.

Let's show how it will work.  Obama, next term, would LOVE to tax business for "cap and trade" which will increase the size of the huge and costly Federal bureaucracy to implement the new tax collection.  Then, because you can guarantee that it will be incredibly complicated and onerous, the administration can give "waivers" in exchange for political contributions and support.  Then, they will "redistribute" the tax payer money to money-wasting Solyndra-like entities, political cronies and the politically-connected---especially those outfits with Union labor!  Then the politically "favored" can make campaign donations back to reward the hand that fed it.  It has little to do with reducing greenhouse gases--because cap and trade won't reduce emissions (except that the economy will slump further--which will indeed reduce CO2 emissions)!!   The only thing they care about is staying in power by "redistribution".  It's the most cynical thing in the world.  That's Obama's trickle-down.

Oh, and while taxes go up and government spending continues rising even more, the economy stagnates.  Then, for "some reason" tax revenue "unexpectedly" disappoints and the Bureaucrats will argue that they must raise taxes again.  Rinse, repeat.   How do you think Europe ended up with 50% tax rates, no self-defense (military) and still massive debt and deficits??  

We can see a typical government money-wasting "investment" that is an integral part of Obama's "trickle-down" plan in the Solyndra "scandal".   The problem for the nation is that there's no end to such "adventurism."   From The Heartland Institute:
The last major effort to involve the government in developing energy technology before the Bush and Obama administrations occurred when the Carter administration created the giant Synfuels Corporation. Like the current loan guarantee efforts, Synfuels wasted millions of taxpayer dollars on supposedly “green” energy technologies that nobody wanted to buy or sell without the subsidies. After a series of Solyndra-like blowups, a mostly Democratic Congress and the Reagan administration put the boondoggle out of its misery.
Nearly every major subsidy governments have handed out to design a consumer product has ended in disaster. A Clinton administration “supercar” program to help U.S. automakers develop hybrid cars spent millions, but because it set unrealistic goals, it put the United States behind Honda and Toyota in bringing practical hybrids to market. A French effort at establishing a national network of computer terminals in the 1980s cost billions of dollars, but because the government insisted on using a dead-end 1970s technology, it essentially ensured the country got left out of the Internet boom. Tiny Finland now has more important Internet companies than France.
The numbers for “green” jobs are particularly dismal. A study of Spain--which has spent more per capita on “green jobs” than anyone else--found the overall economy lost 2.2 jobs for each green job created at a private firm.
History is littered with the failures of central planning socialism.   How many failures does it take for people to recognize the folly of big government.

The US founding fathers had it right the first time and for 70% of our history.  Big Government is the road to ruin and tyranny.

Tax Rates by Income Categories (For Reference)

Here's the raw data.  The original graph is here.

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