There is a lie circulating in American politics right now that says Americans don’t want new taxes and will withstand just about anything else to avoid a tax increase. Cut entitlements, cut benefits, even let us slide toward default but don’t raise taxes.
It’s the new American third rail, which is becoming the biggest threat to our already fragile economic recovery.
Obama called out the new lie when he put the old standby, Social Security on the bargaining table during the recent debt-ceiling crisis. He said to the others at the table that nothing was off limits, including taxes because we all needed to compromise but no one took the bait.
Instead Boehner and company threw down the gauntlet over taxes for the wealthy and said they were willing to risk default. Unfortunately, Obama backed off, tossed away the opportunity and bowed to the pressure at the worst possible moment.
Note that even though we averted the default Standard and Poors still downgraded the U.S. rating by a notch for the first time in our history. They were pointing out something essential that is already tearing apart other once-solid foreign economies to their bare bones. If an entire economic force doesn’t share the cost of doing business it cannot remain healthy.
Besides, there aren’t enough items to cut from the federal budget in order to balance the bottom line even if it was okay to do away with most of what we’ve come to know as an American lifestyle like roads that work and clean water.
But put even that aside for a moment and ask yourself if you want to keep voting for people who say you ought to pay more from your smaller pile than they do, or for that matter their friends and largest contributors to their campaigns.
In recent polls by CBS, the NY Times and CNN, 63 percent of Americans said they can see this truth for themselves as well and are calling for the Super Committee of 12 to instill new taxes for the wealthiest amongst us, including businesses.
The elected politicians’ response was to say they would not allow anyone on the committee who even mentioned a desire for higher taxes. It’s as if the voters no longer matter at all, except to pay their bills for them. An amazing lack of accountability or shared sacrifice or even just a little awareness about the potential harm for claiming uniqueness as a reason to not pay their part of the American tab.
On the surface the no-new-taxes sentiment makes perfect sense. None of us want to go to work all day and do our best only to watch more of it go out the door. It really makes us grind our teeth when we’re told about all of the pork barrel projects that cost millions and benefit such a small group of people.
We paid for that nonsense with our middle-income paychecks and big, whopping tax bill. But there’s where the lie starts.
Let’s get a few of the other myths surrounding this tall tale out of the way right now. Another favorite is that no new businesses will be created if the wealthy, in particular, face higher taxes. They’ll lay off more people and protect themselves against the taxes by sitting on their money. We’ll ignore what that says about their American character or integrity and just look at the facts.
The truth is that during the decades before the 1990’s when the tax laws started to favor the rich more new jobs were added in America and yet the wealthiest amongst us paid more in taxes. Business boomed.
Since then, fewer taxes and less jobs and the ones most hurt by that have been the average voters who bought the lie.
Another one is that the big investors won’t invest. They’ll back off if they know that a bigger portion of their profits will be taken in the form of taxes. Not true.
Big investors continue to invest in up and down times whenever they find something worthwhile. They’re looking for ways to make the most return on their dollar and that never involves standing on the sidelines, ever.
Here’s another one. The wealthy are already taxed at higher rates. However, tax laws favor the wealthy who can make investments and take measures to avoid their bracket. The rest of us cannot and end up carrying more of the load. It’s the dollars that end up getting sent in that matter and the wealthiest don’t send anywhere near the same percentage as the middle class.
All of us in America who are stuck in the middle may not have enough money to buy our own ticket but we do have power. It comes around every Election Day at the polls. Pay attention to who’s saying the American lifestyle matters, which it does, but aren’t willing to pay their fair share and vote accordingly.