29 November 2012
Lotto Luck Avoiding the Fiscal Cliff
As American teeters at the edge of the fiscal cliff, and most of the Lamestream Media gave saturation coverage to Powerball mania, it may be instructive to use the lotto fever paradigm to explain the futility of “soaking the rich” via President Obama’s unceasing class warfare campaigning as governing strategy.
As the Heritage Foundation’s graphic illustrates, even confiscating all of the lucky Lotto winners gross (granted government already takes around 50%), this would only fund the Federal Government for 86 MINUTES. As Representative Tom Price (R-GA 6th) pointed out that President Obama’s plan to increase rates on the wealthiest 2% of Americans would only fund the government for EIGHT DAYS. John Stossel points out that seizing the income of Americans earning $1 million or more would only garner $616 Billion, which is only 1/3rd of this year’s deficit.
It is worth noting that Mr. Obama’s opening bid to avoid the fiscal cliff was raising taxes by $1.6 Trillion over 10 years with ambiguous ersatz spending cuts made by future legislators.
Unless the IRS dons brown shirts, they probably will not seize all of the assets of the richy rich. And remember that the Obama Administration considers the rich to be singles making $200,000 or couples making $250,000 a year. Those upper incomes might be living large in “flyover” country, but in the true politically blue coastal cities like NY, DC, LA or SF, that may be barely getting by as middle class if you are married with children.
Much as it may be satisfying to socialist sympathsizing class warriors who want to excoriate the unconnected high income individuals, it is worth doing a cost benefit analysis. Great Britain scrapped their 50% tax rates on high income earners when it discovered that it was garnering 2/3rds less than expected with the confiscatory rates. Newly elected French President Francois Hollande thinks that he can raise the rates on top Gallic grossers to 75% for just two years to better balance the books. Alas, French tax evaders can take a 90 minute trip on the Chunnel to avoid those outrageous tax rates. Soon Californian will see if there is capital flight after voters passed Proposition 30, which raised both taxes on the wealthy and the state sales tax in the midst of a shaky economy. Will the mobile upper economic crust from the Golden State flee to lower taxing states–Who is John Galt?
While conservatives were disappointed that President Obama achieved re-election, the time for being campaigner-in-chief is over–now is the time to govern. If President Obama is a leader then he should work with his Congressional counterparts to craft a legislative vehicle to avoid the fiscal cliff. But if the Obama White House persists in playing puerile politics on Sequestration, then it may be time for Thelma and Louise, albeit without the sensible shoes.
If the American public thinks that by soaking the wealthiest one percent, it will balance the budget, then lotto luck. If they are able to engage in critical thinking, it would behoove them to determine what is someone’s “fair share”. Moreover, since the Obama Administration has defined millionaires downward to just $200,000, they should discern how low the label of the wealthy will go when seizing true millionaire’s incomes only funds the government for around just 100 days. As Ayn Rand observed in Atlas Shrugged: “If you don't know, the thing to do is not to get scared, but to learn.”