Everyone is comparing Sarah Palin to Barack Obama. Despite having more executive experience than Mr. Obama, she is not the one running for president. She is on the ticket as VP, as is long time senator Joe Biden. While Joe does not have executive experience, he also does not have a grip on economic logic, which is not that hard to follow. The problem is that half of the American voting public either does not understand simple economic logic or they just simply choose to ignore it because it does not allign with their idea of our country's agenda.
Today, Joe Biden said that paying higher taxes is in fact a "patriot act," and that the wealthy in our country should look at paying higher taxes as "time to be part of the deal, time to help get America out of the rut." Simply enough, the wealthiest 1% currently pay 40% of all income taxes. If this not patriotic enough, Mr. Biden? What would truly make the wealthy in America patriotic? 60%?
The funny thing is that after the Bush tax cuts the wealthy started paying a higher share of tax revenue, and the total tax revenues today far eclipse the revenues received under Bill Clinton's tax policy. Well, how could this be? How can tax revenues possibly go up if taxes are cut? It's very simple. Let's follow it in a simple, chronological form.
1. Under Bill Clinton, the income tax was very progressive (the wealthiest paying the highest rate), and the capital gains tax was at 28%.
2. George Bush gets elected, introduces his tax cuts for everyone, including the wealthy (the wealthiest still pay the highest rate), and lowers the capital gains tax to 15%.
3. The wealthy now have less of their income going to the government, and have increased incentive to invest, being that the tax they have to pay on their gains is now 15% as opposed to 28%.
4. Investment and money are the lifeblood of business, and is therefor the lifeblood of American jobs. Increased investment means that start-up companies have an easier time finding funding and existing companies have the ability to grow faster, which creates more jobs at every level.
5. More jobs at every level means more tax payers. More tax payers means more tax revenue. Faster growth means more tax revenue on business profits, because these profits grow at a faster rate.
So Mr. Biden thinks that being patriotic is to stifle investment at the top. He thinks that taxing the rich, taxing businesses, taxing oil companies will allow our economy to grow. He thinks that inflating the size of government will create more jobs for Americans. How could this possibly make sense?
The truth is that if Obama and Biden get elected, everyone will feel the pressure from a higher tax burden. Business growth will slow, job growth will decline, and guess what? Tax revenue will increase at a slower rate.
During a primary debate with Hillary Clinton, Barack Obama was asked,
"Throughout history, every time the capital gains tax has been lowered revenue from the tax has increased. That being said, do you still want to increase the capital gains tax?"
Obama tried to dodge the question, but when prodded, he eventually came out and said,
"It's not about the money, it's about being fair."
To Obama, it does not matter if the government sees higher revenues or faster growth. To him it is just about "being fair."
Unfortunately for Americans, "being fair" is felt at every level, not just at the top. When oil companies are taxed, prices for the end user goes up. When companies' taxes are raised, they have to cut jobs and increase prices. But Biden says that if the wealthy pay more taxes they will be helping America "get out of a rut."
Don't fall for Obamanomics. They simply hurt the people they are intended to help.
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