November, 2012 browsing by month


Hitting the Rich

Tuesday, November 27th, 2012

Reader Paul Fontaine suggests on Instapundit (Nov 9) what seems like an appealing solution to hitting Obama’s wealthy supporters. I only wish it would work. Like Warren Buffett, they don’t pay anywhere near the top rate. If they take any salary at all, it’s low. They sell assets and pay capital gains tax. Or better yet, they just borrow against their wealth and deduct the interest, and postpone the tax indefinitely. The only way to get these people to contribute is to flatten the tax and eliminate the deductions. Turbo tax software would ask, “how much did you make from all sources? Multiply by 0.2 and send it in.”

Eliminate withholding at the same time and we’d see massive spending cuts by the following weekend. Will it happen? Of course not. Obama well understands that a complicated tax code allows him to demonize the abstract 1% while letting the wealthy keep their money. It’s Obama’s deadweight loss hat-trick: “Don’t pay taxes, send a small percentage of it to me instead.” High tax rates don’t bring more revenue, they just make the middle class feel better. If the middle class weren’t so easily mesmerized by class warfare and figured this out, the jig would be up.

So I ask myself, what’s the solution? Looking long, it’s school vouchers. Sound like a non-sequitur? Think again. Unfortunately at this point, school vouchers seem about as likely as a free market…