Go after the hated rich, make up phony stories, hit them hard with taxes on their wealth, listen to the applause, figure on Democrats now winning the midterm elections and pretend it’s all about debt reduction and compassion for the average American. That’s President Joe Biden for you, skipping the parts about governmental exploitation and possible economic wreckage. He is not always confused after all, just another sly politician.
With maybe a wink if you looked carefully enough, Biden said at a televised press conference (no questions allowed) that billionaires in this country were paying taxes on just 8.2% of their income. That’s not true. Biden is counting stock gains not yet converted to money as income. They are therefore not income and, whatever they are worth on the day of collection, they could be worth a fraction of that or nothing the next day. His human targets are not just billionaires, as he wants you to believe, but everyone worth $100 million or more, and he plans to take at least 20% of “income” with the possibility of more hanky-panky.
Taxes on such assets as stocks are known not as income taxes by anyone educated in the subject, but as wealth taxes. That’s what always overreaching Elizabeth Warren cheered for during the Democratic presidential primary even though they have not worked in Europe where most countries have abandoned them. One issue is that they would cause both foreigners and Americans to invest less money in these United States. The consequence could be less capital needed to expand, create jobs, pay employees more and charge consumers less.
And, believe it or not, we right now have the most progressive tax system in the developed world except for tiny Luxembourg. That means the rich in the United States pay higher taxes as a percentage of income per capita and the middle class pay a lot less than in Europe, a model for the left.
It is true as Biden has pronounced, with tears contemplating a run down his cheeks, that our middle class is shrinking, but that has been because people are making more money and moving up in economic status, not because they are making less and moving down. Something else to keep in mind is that 57% of our workers paid no federal income tax at all last year, while the top 10%, bringing in less than 50% of all income, paid 70% of all the taxes.
Our poorer citizens also get a lot more benefits of varied sorts from government than the high and mighty, meaning monetary inequality is nowhere near what it is often said to be.
Of course, average folks still pay a lot in payroll and state and local taxes, the COVID virus has left a mess and our deficit could someday ruin us, but there is good news out there. It is that jobs increased by 431,000 last month as wages grew and unemployment went down to 3.6%. Biden contends his shaky plan would reduce the threatening deficit by $1 trillion over the next decade, but a far more effective plan would be to cut spending, especially given the return of earmarks, also known as pork. This is the practice whereby a member of Congress sells his vote on some issue or the other to get more money for a local project benefitting him or her politically while often being wasteful.
Not a few government programs take more than they give, and reform can reduce deficits, help fight inflation, spur the economy and offer Americans better lives and our children more secure futures. I would suggest Biden and his executive colleagues sweat their way through identifying what spending can and should go away instead of making our amazing country less amazing. If they don’t, the Supreme Court may save us. The words of the Constitution only allow federal taxation on real income, as literacy informs us.
Jay Ambrose is an op-ed columnist for Tribune News Service. Readers may email him at firstname.lastname@example.org.