The Invincible Lie: Part II
The Invincible Lie: Part II
By Thomas Sowell
As far back as the 1920s, a huge cut in the highest income tax rate led to a huge increase in the amount of tax revenue collected by the federal government. Why?
Nothing produces more of a sense of the futility of facts than seeing someone in the mass media repeating some notion that has been refuted innumerable times over the years.
On July 9th, on CNN's program "The Situation Room" with Wolf Blitzer, commentator Gloria Borger discussed President Obama's plan to continue the temporary extension of the tax rates established under the Bush administration -- except for the top brackets, where Obama wanted the tax rates raised.
Ms. Borger said, "if you're going to lower the tax rates, where are you going to get the money from?"
First of all, nobody is talking about lowering the tax rates. They are talking about whether or not to continue the existing tax rates, which are set to expire after a temporary extension. And Obama is talking about raising the tax rate on higher income earners.
But when Ms. Borger asked, "where are you going to get the money from?" if you don't raise tax rates, that assumes an automatic correlation between tax rates and tax revenues, which is demonstrably false.
As far back as the 1920s, a huge cut in the highest income tax rate -- from 73 percent to 24 percent -- led to a huge increase in the amount of tax revenue collected by the federal government. Why? Because investors took their money out of tax shelters, where they were earning very modest rates of return, and put their money into the productive economy, where they could earn higher rates of return, now that those returns were not so heavily taxed.
This was the very reason why tax rates were cut in the first place -- to get more revenue for the federal government. The same was true, decades later, during the John F. Kennedy administration. Similar reasons led to tax rate cuts during the Ronald Reagan administration and the George W. Bush administration.
All of these presidents -- Democrat and Republican alike -- made the same argument for tax rate reductions that had been made in the 1920s, and the results were similar as well. Yet the invincible lie continues to this day that those who oppose high tax rates on high incomes are doing so because they want to reduce the taxes paid by high income earners, in hopes that their increased prosperity will "trickle down" to others.
In reality, high income earners paid not only a larger total amount of taxes after the tax rate cuts of the 1920s but also a higher share of all the income taxes collected. It is a matter of record that anyone can check out with official government statistics.
This result was not peculiar to the 1920s. In 2006, the New York Times reported: "An unexpectedly steep rise in tax revenues from corporations and the wealthy is driving down the projected budget deficit this year."
Expectations are in the eye of the beholder. Tax cut proponents expected precisely the result from the Bush tax cuts that so surprised the New York Times. So did tax cut proponents in the John F. Kennedy and Ronald Reagan administrations.
If this concept has not yet trickled down to the New York Times or CNN's Gloria Borger, that is a commentary on the media commentators.
Ms. Borger may simply not know any better, but Barack Obama cannot use that excuse. When he was a candidate for president back in 2008, Charles Gibson of ABC News confronted him with the fact that there was no automatic correlation between the raising and lowering of tax rates and whether tax revenues moved up or down.
Obama admitted that. But he said that he was for raising tax rates on higher income earners anyway, in the name of "fairness." How higher tax rates that the government does not actually collect make any sense, whether from a fairness perspective or as a way of paying the government's bills, is another question. The point here is that Obama knew then that tax rates and tax revenues do not automatically move in the same direction.
In other words, he is lying when he talks as if tax rates and tax revenues move together. Ms. Borger and others in the media may or may not know that. So they are not necessarily lying. But they are failing to inform their audiences about the facts -- and that allows Obama's lies to stand.
**************************
Create your own visitor map
()()()()()()()()(()())()()()()()()()()()
Interesting Pics 2012
#######
Jer's Photo of the Day
Photos and Photo Art by Sebastianjer
***
Election 2012
Since April I have been tracking "Likely Voter" polls in the states that could possibly be in play in November. These are not polls of just "registered voters" but only those of "likely Voters" which are generally accepted to be the most accurate. As we get closer to the election most polling outfits will begin to poll only "likely voters" at present only a few do now. I will post the most recent of these LV polls as I find them. A (+) represents Obama is up a (-) represents that Romney is up in that state according to the most recent LV poll.
FL -1/OH -3/ PA +6/ IA +1/ NC -3/ VA -5/ AZ -13/ CO +4/ NV +8/ MO -7/ NH +3/ MI +1/
MN NA/ WI +8/ ME +14/ OR NA/ NJ NA/ NM +11/ GA +12/ SC NA/ IN NA/
BOLD are changes since 6/27 and direction of change for Obama (>)up (<) down since last poll
IA >
NH <
MI >
WI >
GA New
ME New
NM Bew
FL <
States where over 50% of voters would vote for President Obama in the above polling data:
NV 52%
NM 51%
States 45% or below for Obama
FL 45%
OH 45%
IA 45%
NC 44%
VA 43%
AZ 41%
MO 42%
GA 40%
Read here for significance
Recent News
Why Obama Is in Trouble
Obama Campaign Is in Worse Shape Than It Looks
History in Pictures
()()()()()()()()()()()()()()()()()()()
NOT EXACTLY FRONT PAGE NEWS
Auditors: Obama administration is bending health law
########
The religion of Climate Science
Climate in northern Europe reconstructed for the past 2,000 years: Cooling trend calculated precisely for the first time
****
Good Reads
The Norwegian 'Miracle'
Fast and Furious Is Not a D.C. Law Firm
HONEY, I SHRUNK OBAMA
Obama’s School Vacations
###
TODAY'S QUOTE
"The eurozone is unraveling. An aging, shrinking population and a socialist welfare state lead to serfdom, not utopia."
Victor Davis Hanson
Reader Comments
Page: 1 — Blog Index
The Democratic Party as the Party of Race
By Roger L Simon
As someone who was a sixties civil rights worker, wrote movies for Richard Pryor [1] (successfully) and Whoopi Goldberg [2] (unsuccessfully), and has had the pleasure of working with many talented African Americans at PJ Media for nearly seven years now, I think I have earned the right to write what should be painfully obvious to everyone — most of the racism in America today is from blacks (aided and abetted by white liberals) toward whites.
In fact, it’s getting to be outrageously so. The rude treatment of Mitt Romney at the NAACP convention is yet another data point in what has become an all-too-predictable scenario.
Much of the reason for this stems from the extreme dependency of the Democratic Party on race politics. With union membership dwindling, the party would literally disintegrate without the overwhelming support of African Americans and Hispanic Americans. Without at least the perception of racism, the Democratic Party has only marginal support. The party is forced to encourage it for its survival.
A whole network of connections, careers, and lifetyles has evolved from that, many of them largely counter-productive. Indeed, the argument can be made that the Democratic Party has destroyed the lives of minorities in order to save itself. Their programs, from the Great Society onwards, have done nothing substantial to improve minority lives, only to encourage dependency. The proof of this failure we see before us today in the dreadful statistics on black and Hispanic unemployment, far worse than the already horrendous national numbers. The more minorities are “helped,” the worse their lives become, the less equal we are.
The Democratic Party is then the true racist party, trapped in nostalgia for a time when genuine racism — Jim Crow, etc. — stalked the land. They have to assume significant white racism still exists because not to do so threatens the fabric of their being. A Tea Partier has to be a racist [3] so you can dismiss his ideas without having to confront them or even think about them. Mitt Romney is just another rich white man so you don’t have to deal with what he is saying [4], you don’t have to evaluate whether he has a solution to a mutual problem.
It’s all racist as I understood the word in the sixties — making assumptions about other people so you don’t have to consider their humanity — only it’s now in reverse. This isn’t to say that whites undergo severe oppression. They don’t. But the racial climate of our society is increasingly polarized and the survival of the Democratic Party, as presently constituted, is the cause. Everyone’s life suffers as a consequence, with the exception perhaps of those who make a living off race-baiting. That the minorities being exploited suffer most of all is almost a cliche. Unfortunately, it also happens to be true.
Correcting this depressing conundrum will not be easy. It is a long time in the making and is based on numerous mythologies and misconceptions, not to mention deeply entrenched habit. It is also based on vengeance, a vengeance fanned by the liberal media for the preservation of their own power and to validate that same nostalgic self-righteousness. But vengeance is an especially powerful creator of racism (remember Gandhi: an eye for an eye and the world will die). Because whites behaved in an atrociously racist manner toward blacks in the past cannot be allowed as any sort of justification for the reverse. That is a prescription for perpetuated mutual destruction.
And yet that remains the spoken/unspoken predicate of election 2012. Just as America rejoiced in electing Barack Obama in 2008 as the first (part) African American president, we are being asked to reelect him for similar reasons. But it would also be racist, perhaps more so, actually to reelect him for similar reasons. The color of Barack Obama’s skin is and should be irrelevant. And yet, of course, it has not been and continues to be the trump card of the Democratic Party. If Barack Obama were white, he would be one of the least likely candidates for reelection in American history. Instead, despite demonstrated incompetence, he remains in contention, perhaps even the favorite. Under current conditions, however, the reelection of Barack Obama can be seen only as a triumph of racism.
I have followed your series about Obama's early years with interest, and the emerging facts support my conviction that Obama's intent is to crumble this country from many sides. But, whatever one believes, the reality of what Obama policies and politics have done to the country as a whole is now a fact. Ideology aside, how can one applaud a stumbling economy, cities going bankrupt, education falling further behind, higher energy prices, continued high unemployment rates, etc.? This isn't working.
How do you people feel about paying a huge increase, as retired folk, on your dividend income?
Just remember who you are and who lied to you,,,, just like the rest of us!
I am America, are you?
Viewing: 1 - 3
Page: 1 — Blog Index