REAL DEFICIT HAWKS WOULD TAX THE WEALTHY
(In response to John Gaylord’s Sept. 15, “Looking at taxes and the right to be a billionaire.”)
The top 1 percent of American households receive 24 percent of the nation's personal income.
President Barack Obama's attempts to allow the Bush tax cuts to expire on the top 1 to 2 percent of households — a modest increase of less than 5 percentage points to the top marginal tax rate — were rebuffed by conservative Democrats when the Democrats held the majority, and are now rebuffed by the Republican majority.
Both claim to be afraid of "killing jobs" by taking money away from affluent individuals who might otherwise invest it in businesses.
What's often overlooked is that many of these individuals are already investing it, not in businesses, but in the U.S. government, which, as a means of deficit financing, borrows money from wealthy individuals eager to park some of their excess cash in a safe place, U.S. Treasury securities.
It should be obvious that money available as a loan, to be repaid with interest, is also money available as tax collections, free of obligation.
Borrowing the cash increases the deficit: Obtaining it through taxation reduces the deficit, since taxes collected are not repayable and higher federal revenues decrease the need for federal borrowing to fund the budget.
If low taxes spurred economic growth, then Nevada, which has zero personal and corporate income taxes, should be an economic powerhouse; instead, unemployment there has been increasing and stands at 12.9 percent.
Supposedly, the ever-increasing reliance of politicians on a small core of wealthy donors doesn't affect their judgment or policies.
If so, politicians, whether Republican or Democratic, should stop acting as the first line of defense for wealthy interests or else they should stop pretending to be deficit hawks.
Emil Pulsifer
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