First Pelosi and now Clinton.
I don't get it. I really don't.
During a recent event, Hillary Clinton went on record lamenting the "fact" that the rich are not paying their "fair share" in taxes. She then went on to make what I think is an incredibly silly comparison to Brazil.
Here are the two statements she made.
The first statement:
"The rich are not paying their fair share in any nation that is facing the kind of employment issues (the United States is), whether it's individual, corporate, whatever the taxation forms are."
Seriously? The "rich" here in the US pay 40% of the entire US tax burden. As it stands now, after all is said and done, only 51% of wage earners in the US pay (net) taxes. The remaining 49% either have no tax burden at all or are refunded all taxes paid. And the "rich" here are the top 1% (one percent!!!!) of wage earners.
So, you got 1% of a population paying 40% of the total tax burden for that population. How much more of a percentage would be considered "fair"?
The second statement:
"Brazil has the highest tax-to-GDP rate in the Western Hemisphere and guess what -- it's growing like crazy."
Why do I think that is an incredibly silly statement?
Consider the following points:
The highest tax rate in Brazil is 27.5%.
The highest tax rate in the US is 35% (soon to increase to 43%).
The GDP of Brazil is around $1.58 trillion.
The GDP of the US is around $14.6 trillion.
The Tax:GDP ratio of Brazil is around 38.8%.
The Tax:GDP ratio of the US is around 28.2%.
The Debt:GDP ratio of Brazil is around 14%.
The Debt:GDP ratio of the US is around 94%.
Then consider that the tax code in Brazil places a greater burden on salaried workers and a significantly lesser burden on wealthy business owners.
Finally, this statement implies that higher taxation equates to greater economic growth.
Ask any economist that knows their craft. Higher taxation equates to lower economic growth, not greater. Not to mention that with higher taxation, you also get greater tax avoidance and unemployment.
Why do our elected leaders seem so completely obtuse to something that makes this much common sense?
I don't get it. I really don't.
Wednesday, July 14, 2010
Be Like Brazil - Tax More!
Friday, July 2, 2010
Unemployment Benefits Creates Jobs - Huh?!?
Even if you accept the idea that unemployment helps the economy by providing those without work money to spend, and thus inject it into the economy, how can it possibly help create jobs?
Well, Nancy Pelosi seems to think it does.
Personally, I think she's either lying or not seeing straight. In any case, she's definitely drinking some kind of fancy-shmangled koolaid that only our politicians seem to have access to.
First, umemployment is paid from federal taxes collected. Those paying the taxes are employed, and thus being "productive" (I know not all workers can be described as productive, thus the quotation marks). Those who are unemployed (through no fault of their own and I really hope the large majority want to get back to work) are "unproductive", since they aren't working. So, in this case, the money taken from the "productive" (those employed) is being given to the "unproductive" (those unemployed). Of course, an added insult here is that those receiving unemployment have to pay taxes on that money!
Ultimately, though, unemployment is a symptom. Focusing so much time, energy, and money on a symptom just doesn't make a lot of common sense to me. While I can accept temporary relief as the real problem is addressed (which is why companies aren't hiring or are reducing headcount, and there are a large number of reasons for that, thanks to our government), I find unacceptable this apparent effort to make it a mainstay by saying it *creates* jobs. My common sense tells me that's a pipe dream and I shouldn't buy into it.
Then, there is the moral hazard associated with unemployment. If one accepts the meager living they can make on unemployment, why look for real work?
Albert Einstein was indeed a genius, and not only in physics. With proposed solutions like this from our leaders, his sage advice of "never look to those who cause a problem to solve it" seems more common sensical than ever.
Well, Nancy Pelosi seems to think it does.
Personally, I think she's either lying or not seeing straight. In any case, she's definitely drinking some kind of fancy-shmangled koolaid that only our politicians seem to have access to.
First, umemployment is paid from federal taxes collected. Those paying the taxes are employed, and thus being "productive" (I know not all workers can be described as productive, thus the quotation marks). Those who are unemployed (through no fault of their own and I really hope the large majority want to get back to work) are "unproductive", since they aren't working. So, in this case, the money taken from the "productive" (those employed) is being given to the "unproductive" (those unemployed). Of course, an added insult here is that those receiving unemployment have to pay taxes on that money!
Ultimately, though, unemployment is a symptom. Focusing so much time, energy, and money on a symptom just doesn't make a lot of common sense to me. While I can accept temporary relief as the real problem is addressed (which is why companies aren't hiring or are reducing headcount, and there are a large number of reasons for that, thanks to our government), I find unacceptable this apparent effort to make it a mainstay by saying it *creates* jobs. My common sense tells me that's a pipe dream and I shouldn't buy into it.
Then, there is the moral hazard associated with unemployment. If one accepts the meager living they can make on unemployment, why look for real work?
Albert Einstein was indeed a genius, and not only in physics. With proposed solutions like this from our leaders, his sage advice of "never look to those who cause a problem to solve it" seems more common sensical than ever.
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