Basing a political campaign on class warfare isn’t just sleazy politics — it’s un-American. It’s plain wrong to boot.
According to the National Taxpayers Union, in 2009, the bottom 50 percent of wage earners accounted for only 2.25 percent of the total revenue collected from income tax. The top 25 percent paid 87.3 percent. This leaves that group of taxpayers ranging from the middle to the top 25 percent — those we refer to as the “middle class.” These folks accounted for 10.45 percent of the tax revenue collected in 2009.
Notwithstanding the wealthy’s 87 percent contribution to society, the president routinely excoriates the top 25 percent in his campaign speeches for not paying “their fair share.” He then refers to his GOP opponent, Mitt Romney, as “Romney Hood,” for suggesting that corporate and upper-income tax rates be lowered. He finally points to the 14 percent tax rate Romney pays as proof positive that the wealthy are living off the blood and sweat of the middle class.
So what would happen if we had it Obama’s way? What would be the result if the upper-income tax rate were increased so that the wealthy would pay “their fair share?”
Thankfully, that question was recently answered for us. The Independent Community Bankers of America, the National Federation of Independent Business, the S Corporation Association and the U.S. Chamber of Commerce hired Ernst and Young, one of the country’s premier accounting firms, to analyze that very question. The answer was sobering. On page 16 of their report, they conclude:
Overall, this study finds that the higher tax rates would reduce output in the long-run by 1.3% when the proceeds are used to finance additional government spending. Employment would fall by 0.5%. In today?s economy these changes would translate into a decline in GDP of $200 billion and employment by roughly 710,000 jobs. Investment, the capital stock (net worth) and real after-tax wages would also fall.
That’s 710,000 jobs lost at a time when the July jobs report indicated that unemployment increased a 10th of a point to 8.3 percent. Clearly, our problem isn’t under-taxing — it’s overspending.
The president’s deficit commission, co-chaired by Democrat Erskine Bowles and Republican Alan Simpson, was created to address this very problem. Their result was the bipartisan Simpson-Bowles deficit reduction plan. Wells Fargo Private Bank Strategist Ron Florance saidof the plan: “Simpson-Bowles is my utopia — it’s an honest acknowledgement of spending and revenue. If enacted, we would see a dramatic change in economic activity and in the mood of the capital markets.”
Former Federal Reserve Chairman Alan Greenspan said that the president’s rejection of Simpson-Bowles was his “worst mistake.”
Was Simpson-Bowls perfection? Of course not. But then again, perfection only exists in heaven and in the imaginations of adoring parents — never in politics.
The class warfare has to stop. Given the elementary wrong-headedness of the president’s position, it’s long past time that he took his own advice and began toning down the campaign rhetoric. After all, the economic future of the nation may depend on it.
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