“Thick” is the name my mom called me when I had the wrong take on something. It still does haunt me. There is no such thing as corporate taxes, corporate subsidies, or corporate welfare; there are only consumer taxes and resulting increased or decreased prices. This regressive government “tax” practice hurts the working poor the most. Government manipulation of business tax code is one the greatest tools to buy votes and pick and choose winners we unequal Americans face. If we raise taxes to say 50% on the evil Caterpillar Corporation they are forced to raise their prices to meet fiduciary and other responsibilities to their stock holders ( a stock holder like say the teamster pension fund). All is good until Cat sales drop off because their prices are no longer competitive with Komatsu which enjoys a lower tax rate. How do so many Americans not understand business taxes? Easy they equate them to their own taxes when in reality they are two completely different animals. This ignorance is easily taken advantage of by unscrupulous politicians with envy and bigotry used as assistants to drive home the manipulation. If you are dependent on tax payer money that does not give you an excuse to be mislead; you don’t get a pass on ignorance just because you don’t care about private economic activity other than eating its fruit.
Due to human nature and congressional manipulation of the tax code the effective tax rate on the very top evil rich corporations or evil individuals is about 19%. Our tax rates for the evil rich have been as high as 90% and now are at 35% while the effective rate has been fairly stable at 19%. Those pesky humans tend to change their behavior when they feel they are unfairly taxed. However the low end earners within the highest rate like small and medium business find higher taxes stifles job creation as many of these businesses have limited options and pay a higher effective rate. They also struggle with pricing due to far more competition. In order to transfer higher consumer payments to the government many businesses have to cut labor which is their largest expense to maintain needed profit margins (the owner of the business has to pay to send his or her kids to college, to think they don’t use government largess, da nerve).
There is a rather clear example of progressive politicians believing their own propaganda. It may help those who still struggle with their need to remain “thick”. Omnibus Budget Reconciliation Act of 1990 (a Rep. Patrick Kennedy soak the rich scheme).In 1990 there were no luxury excise taxes, all of them having been repealed. Patrick felt the rich who bought aircraft, jewelry and furs over certain prices and yachts costing more than $100,000 should be punished for their ability to buy high end consumer products. In 1990 it was projected that the 1991 revenue yield from new luxury taxes would be $31 million. It was $16.6 million. According to a study done for the Joint Economic Committee, the tax destroyed 330 jobs in jewelry manufacturing, 1,470 in the aircraft industry and 7,600 in the boating industry. The job losses cost the government a total of $24.2 million in unemployment benefits and lost income tax revenues. So the net effect of the taxes was a loss of $7.6 million in fiscal 1991. Needless to say congressmen Kennedy is no longer “thick” why should you be? It is one thing for politicians to use stupidity for their benefit it is quite another thing if politicians believe their own malicious class warfare propaganda. To make up for his transgression Patrick introduced a bill to give the evil rich a 20% tax break if they purchased a yacht. Man you got to love a reformed progressive. I wonder if he had to do a twelve step program.
No comments:
Post a Comment