Who Needs Lower Taxes?

President Obama remarked in his weekly radio address Saturday that he does not want to continue the Bush “tax breaks for folks at the top who don’t need them.”

Unintentionally, he makes a good point. “Folks at the top” may not necessarily “need” tax breaks. But folks at the bottom need folks at the top to have them!

“Folks at the top” are business owners, investors and job creators. If taxes go up, they don’t trim their profit margin. They trim their overhead.

And what’s the biggest part of overhead for most businesses? Payroll; i.e., jobs. Tax folks at the top and watch folks at the bottom get laid off.

The president and his Democrat allies see things differently. They think more unemployment checks will help people get through the downturn.

In actuality, people will get through the slowdown when they find work. And people will most likely find work when their unemployment checks run out. It’s basic economics, not to mention basic parenting.

Perhaps Mr. Obama wants a slow recovery in order to build a case for a European-style value added tax (VAT). If economic growth remains low and government spending remains high, he can argue we have nowhere else to turn.

From last year’s gargantuan stimulus bill that garnered no bi-partisan support to the ramming through of the health care bill this year with fewer than 60 Senate votes, the president’s pen hasn’t seen a trillion-dollar spending bill it hasn’t liked.

It also hasn’t seen a 2,000-plus page bill it hasn’t liked.

The massive financial reform bill signed into law this week may not initially be the spending behemoth that the stimulus and health care bills were, but it does create layers of bureaucracy that will ultimately demand significant resources.

So, the spending’s been done. The next step is paying for it. That’s where the argument for a “reformed” tax structure comes in. The president will sell the VAT as a more sophisticated, modern system, but wealth redistribution is nothing new.

And don’t think Congressional Democrats will lower income taxes as a trade-off. That would defeat their purpose of net growth in government control/spending.

The underlying theme is this: You can’t be trusted with your own money. You aren’t capable of caring for your health, educating your children or planning for your golden years.

Henceforth, the Obama administration will contradict proven economic theory in order to assist you.

Mr. Obama’s own chief economic advisor, Christina Romer, wrote in the most recent American Economic Review that “tax increases are highly contractionary . . . tax cuts have very large and persistent positive output effects.”

No matter. Raising taxes is the merciful thing to do. You may not have decent-paying, private sector employment in the years ahead, but your government will soften the blow and blunt your misery.

With centralized health care, stimulus-funded civil service jobs and unemployment benefits, your federal government will add years to your life. It just won’t add life to your years.


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