Tax Cut + War = Deficit

Tax Cut + War = Deficit

This subject line on an email greeted me this morning from my friends at MoveOn.org.  It really bothers me.  Not because I am a "hawk" and am very satisfied with the status of our offensives in the Middle east.   (I'm not.)  Not because it makes a very powerful argument.  (It does.) What really bothers me is the presupposition that one is required to make in order to agree that it is true.  Now, if they had said, "Medicare+War+Funding female Jello wrestling in Antarctica= Deficit".  Alright.  Or I'm even OK with "Food stamps + Shrimp on a Treadmill Studies + War =   Deficit".  But please, please, please...if you're interested in Truth, stop telling us that Tax Cuts are a COST to government.   

That statement is wrong on so many levels.  To hold that view presupposes that the government owns all of our money -- all of it -- and simply allows us to keep a certain amount of it.  It presumes that anything that it "gives back" to us "costs" it something.  That is the only assumption that can be made if allowing us to keep what we think is our hard earned money "costs" the government something.  This is why so many people from the right and, to a lessor extent, the independent side of the political spectrum think that our President leans toward socialism.    

The only way to assume a tax cut a cost, is if you start from the view point that all resources are owned by the government.  Then, anything that you give to people becomes a "cost".  Only then can you can say that a Tax Cut "costs" the government something.  However, understand the importance of personal property and John Locke's argument of ownership: that we own our production and the results of that productivity.  This is ownership.  If you agree then you will also agree that the government takes from what "we the people" own.  It takes for many reasons, some of which are well intentioned and some reasons of which are necessary.  I'm OK with that...in balance.  To live in a free, (relatively) just society, it is good for the federal government to take funds to assure certain things are accomplished.  That must be balanced however, with the idea that government does not have the authority, much less the obligation to borrow beyond our ability to repay, in order to provide these services.  And we are dangerously close to that position in 2011.  When you cut taxes on the means (owners) of production, productivity increases.  When productivity increases, taxes increase: even if the tax rate goes down!  It's a proven fact with which even President Obama apparently agrees.    

Recall the debate between then Senator Obama and Hillary Clinton that Charlie Gibson moderated?  This was the Gibson debate that was "fair" according to the pundits.  Senator Obama tells in so many words that he doesn't really want to raise taxes because it will increase our revenues in the Treasury (Apparently he knows that it won't.)  He wants to raise taxes out of "fairness".

GIBSON:  You have, however, said you would favor an increase in the capital gains tax. As a matter of fact, you said on CNBC, and I quote, "I certainly would not go above what existed under Bill Clinton," which was 28 percent. It's now 15 percent. That's almost a doubling, if you went to 28 percent.

Bill Clinton, in 1997, signed legislation that dropped the capital gains tax to 20 percent.

OBAMA: Right.

GIBSON: And George Bush has taken it down to 15 percent.

OBAMA: Right.

GIBSON: And in each instance, when the rate dropped, revenues from the tax increased; the government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down.

So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?

OBAMA: Well, Charlie, what I've said is that I would look at raising the capital gains tax for purposes of fairness.

We saw an article today which showed that the top 50 hedge fund managers made $29 billion last year -- $29 billion for 50 individuals. And part of what has happened is that those who are able to work the stock market and amass huge fortunes on capital gains are paying a lower tax rate than their secretaries. That's not fair.

Breath taking.  He wants to raise taxes, not because it will increase revenue in the treasury which we desperately need, but because it's not "fair" that other people get to make lots of money.  Is it fair that the money that is taken from the wealthy can no longer be invested in assets that will require people to run (jobs) and new business for people to own? (jobs)  Is it fair that we are actually going to have less money in the treasury to pay our bills because the government would rather play to some intellectual notion of fairness? The reality that the President and Charlies Gibson agreed upon is that revenue in the government treasury GROWS when taxes are lower.  It's not fair to raise taxes, when lower taxes improve all of our lives. 

This is what brings us back to our original notion. Barack Obama and his  wing of the Democratic Party (and yes, some Republicans) want to control as much of our assets as they can, even if it is counterproductive to increasing our revenues.  Plans in place are well on their way to a maximum tax rate over 60%.  This isn't imaginative, congress works on this as we speak.  These tax rates rival the rates of the Jimmy Carter era.    Is it any wonder that one might suspect that it's not really about fairness - that contradiction smacks of control.  Controlling as much of the assets and dollars as possible and giving to "each according to his need".  Thereby explaining why MoveOn considers a tax cut - a "cost".

War + A whole host of Other things we Can't Afford = Deficit.