Why do the republican resist raising taxes on the rich? Its been proven that it won’t produce more jobs to cut their taxes and they can’t say that its unfair because they already pay most of the taxes. When you compare how much they pay %wise compared to the amount of the wealth they control its surely obvious that they don’t pay enough. We know that the tax rate system has benefitted the rich making them able to gain such wealth. Is it there lobbying to republican members(the spend much money in their support and actually get them elected through many means)the reasons the members are against it?
First, you have to define “the rich”. I am convinced that the average person considers himself poor and those earning more than he to be “rich’. So we have to decide just what constitutes “rich”.
Øbama campaigned on “getting the rich to pay more of their fair share.” This is not original, for Bill Clinton use the exact words to get congress to raise taxes “on those earning $300,000 or more." Clinton’s press secretary, Dee Dee Meyers was cornered in a press conference and force to admit that the increase would reach down as far as the $30,000 level, slightly above median and
one-tenth what Clinton claimed.
Then consider this. Rich people are rich because they have more money than they need to live on at an average level of comfort. What do they do with the excess that is not taxed away? They invest it in the economy. This is the capital that makes capitalism work. If you tax more of that capital away, less is invested into the economy, hence, fewer jobs. If you have some excess money, you can do only two things with it: invest it or spend it. The government can only spend it, therefore, government spending is consumption unless it is for some form of infrastructure improvement like roads. Having worked in the government for many years, I can assure you that there is a lot of waste, for individuals will always take care of their own assets better than the government will.
About ten years ago, California was in dire straits, and the federal government offered $3B in bail-out aid. What did Sacramento politicians do? They resurrected over $3B in spending that had been shelved due to the extreme budget shortfall. This is how politicians think. They will always spend more than what is collected in taxes, hence a persistent deficit. So increasing taxes will not solve the problem; it just gives elected officials more to spend and a bigger incentive to borrow more, and for the wealthy to increase lobbying efforts, exacerbating the problem.
One reason that Republicans resist raising taxes on the rich is the “feedback effect”, AKA, unintended consequences that need to be considered. Rich people are powerful because they are rich. If you were super-wealthy you would have a different outlook on taxes from the “they’ve-got-so-much-so-let’s-make-them-pay-more” outlook you currently have, and you would likely use some of your wealth to limit your taxes. Enter lobbyists. Lobbying is such a lucrative business that they can afford to pay college students $30 an hour to hold a place in line for them to get into congressional hearings. The job of the lobbyist is to get congress to vote his clients’ activities favored treatment by the tax code. That’s why the code is so long. It also limits the ability of new entrepreneurs to provide competition with big corporations. Some years ago, when Microsoft started to make big bucks but was not lobbying, it was hit with an anti-trust lawsuit by the government. Gates learned his lesson, and the next year he spent money on lobbying. High tax rates therefore are also an incentive to lobby, and lobbying provides the politician with campaign contributions. So, for both of them, it is a win-win situation. If, on the other hand, there was a flat tax of, say, 10% of the top line [a big number] instead of, say 90% of the bottom line [a small number close to zero], there would be no incentive to lobby because a company wouldn’t be able to reduce its taxes.
About 20 years ago, the* Wall Street Journal *carried an article [wish I’d kept] about a survey done on ordinary people about how they felt about taxes. The average person, it turns out, is willing to try to hurt “the rich” even to the extent that he hurts himself in the process. Clearly, we need to do more to educate people on how the economy works.
Under the current progressive income tax system, “the rich” [those above median] pay essentially 100% of the tax burden. That means “the poor” [those below median] get a free ride. Is this right? I think not for several reasons. If everyone had to pay
something, the poor would learn that it takes money to run a government and that they have the ability to give of themselves too.
