Posted: 03/16/07

Another Liberal Myth!!! "Tax cuts make the rich pay less taxes and drive up deficits"

By Rev. Dr. David M. Berman Th.D   

 www.wakeupandsmellthetruth.com

With the liberal takeover of the House and Senate, it is clear that they will be spewing the same old myths that they always send out through the willing media. It must be said their standard myth about taxes is probably the myth that most people swallow hook, line, and sinker. There is an inherent problem with the basic human condition that makes us envious of others who have more than we do. We hear the cry of the left every time someone has the courage to call for tax cuts. Why do they cry foul? Why is it that tax cuts are a proclamation of a position that is equal to swear word that must not be uttered around women and children? One would think that those words have brought about a scourge on the earth and the destruction of the "little guy". The liberals always cry out about how unfair it is that those mean old rich people get to have their taxes cut, while the poor pay to support this country. On the surface to those who are clueless as to how an economy works, this seems like a fair cry. After all, do the "privileged rich people" really "need" a tax break?

The question, "Do the rich need a tax break?" is a question that demands two answers. The first answer is a philosophical one. The first issue begs the question; what does "need" have to do with freedom to own one's property? In a free society the issue of people prospering based on need is contrary to freedom principles and down right Communist. There is no constitutional requirement or authority given to have someone's personal property confiscated simply because some government agency or political body decides they have enough! That concept comes from the pit of communist Marxist Hell. Marx himself said the following:

"The theory of the Communists may be summed up in the single sentence: Abolition of private property."

"From each according to his abilities, to each according to his needs."

"Capital is dead labor, which, vampire-like, lives only by sucking living labor, and lives the more, the more labor it sucks."

"Society does not consist of individuals but expresses the sum of interrelations, the relations within which these individuals stand."
-Karl Marx

We know the utter destruction and failure of Marxist communist philosophy. We know of the 70 years of oppression in the Soviet Union. The lack of food and quality of life comes from such disregard for freedom in economic principles. This is a fact of history. There has never been anything but destruction caused by Marxist ideology. All one has to do is look at North Korea to see communist continued failure. Communism and Socialism is a direct enemy of the Constitutional Republic that is the United States of America. America eats better, sleeps better, lives better then any communist country does or ever did because of our founding principles of liberty.

The hatred for those who prosper is counter productive and only leads to all people prospering less. "Need" is not an issue that is to determine personal property rights. This is a fact of our founding principles of freedom, and the founding fathers were well aware of the power of government to expand through confiscation of what belonged to individuals.

The next answer to the question, "Do the rich need a tax break?" is the economic one. The second answer is what happens when the idea of decreasing taxes is adopted. Those who say they need more taxes paid by the "rich" often either do not understand economics, or are simply interested in class envy. The truth is that what happens when taxes are cut is counter intuitive. When taxes are cut the rich pay more taxes not less. How can this be? How can it be that if taxes are cut they pay more? The answer is a simply one. The answer is that when overall tax margins are cut it stimulates more economic activity. Those who are in the upper levels of income begin to make more money. When more money is made they have to pay taxes on more income. So although they received a "tax cut" on the percentage of money they pay in taxes, they end up paying more money overall than they did when they were taxed at a higher rate. The liberal myth that the "rich" are not paying their fair share is an outright lie. The upper-income people of this country pay most of the taxes. During the Reagan years when he cut marginal tax rates, the income paid to the government increased dramatically. This is not opinion. This is fact. There is no debate about that except by those who can't bring themselves to admit the error of their leftist philosophy.

In the 1980's the great President Ronald Reagan argued that the tax burden placed on business and individuals was counter productive. He made the argument that President John F. Kennedy made in the 1960's. The predictable chicken little "sky is falling" response to President Reagan was pronounced by the liberals. They said that this was unfair and that the government could not "afford" the tax cuts. It is interesting to note that when liberals want to raise taxes, they never stop to ask if the individual tax payer can "afford" it. What is the truth about the myth proclaimed by the left along with their liberal propaganda partners in the mainstream media? The truth is as follows:

1) In the 1980's, total revenue growth shows that federal revenues doubled from $517 billion to $1.031 trillion. From 1981 to 1989 real federal revenues climbed by 20 percent.

2) When looking at income tax receipts only, income tax revenues grew significantly in the 1980s. In 1981 income tax receipts totaled $347 billion and grew to a total of $549 billion by 1989. This amounts to a 58 percent increase. The truth is that real income tax revenues rose by 16.3 percent from 1982 to 1989 after the top income marginal tax rate had been reduced from 70 percent to 50 percent in 1983, and then to 28 percent in 1986.
(Source - Congressional Budget Office "Economic and Budget Outlook," Dec/1990.)

If the issue was about how much taxes are collected by the government then what would be the problem with this result? For the left it is a matter of ideology. They don't care about that. Ultimately they are anti capitalist. They hate the fact that Reagan was right. To them it is unfair that people can make more money than they "need". (This of course does not apply to the left themselves in their elitist attitude) They also continue the myth by claiming that even if it is true that more revenue comes from to the government from tax cuts, it is still the poor who are paying for the rich. This is an outright lie. Here are the facts.

1) A) In 1981 after years of high tax margins under President Carter the top one percent of income earners were paying 18 percent of the taxes collected by federal government.

B) By 1990 after marginal rates were cut under President Reagan the top income earners were paying 25 percent of the taxes collected by the federal government.

2) A) In 1980 the top five percent of income earners paid 35 percent of the taxes collected by the federal government.

B) By 1990 the top five percent of income earners were paying 40 percent of the taxes collected by the federal government.

3) A) In 1980 the bottom 50 percent of income earners were paying seven percent of the taxes collected by the federal government.

B) By 1990 the bottom 50 percent of income earners were paying six percent of the taxes collected by the federal government.
(Source – Tax foundation "Tax features" Aug/1992)

The myth is that the rich do not pay taxes. The myth is that the poor pay to support the "tax cuts for the rich". This is a lie. The facts are clear that every time taxes are lowered it increases the amount of revenue that is collected by the federal government. This happened when President John F. Kennedy cut taxes in the 1960's, this happened when President Reagan cut taxes in the 1980's, and this happened when President George W. Bush cut taxes in his first term. Revenue to the federal government increased! The critics point to federal budget deficit under President Reagan in the 1980's, and the federal budget deficit under President George W. Bush. They say that the tax cuts have caused the deficit and that taxes need to be raised in order to fix the deficit problem.

We have seen clearly that increasing taxes lowers federal revenue because of the negative effect on economic growth. We have seen that the federal revenue increases with marginal tax cuts due to economic growth. So why is the deficit under President Reagan? Why a deficit under President George W. Bush? The logical conclusion based on facts (not emotion or envy) is that the government simply spent more than it took in because of "pork" projects that attempt to gain favor (in other words buy votes) from the home district. The government is out of constitutional control concerning its spending and its insatiable desire to stick its nose where the Constitution has not given it authority to. The truth of the matter is simple to understand. No matter how much revenue is collected by the federal government, the politicians will spend it. They will squander it and increase their central power with it. The Socialists are deceivers who speak in grand terms of caring for the "little guy". In truth their deception only creates more "little guys" as more people become dependant on Socialist policies. One the worse outcomes of the liberal mind set is the philosophical harm done to poor people who come to believe that they can not achieve prosperity because of those terrible "rich" people. This lie perpetuates poverty and works right into the hands of the Socialists who desire government control of everything.

Socialism is the great hoax that continues to deceive those who have no desire to understand human nature, nor the history of human nature. It is not that most who fall for its deception desire what history teaches of its end, for its end is always tyranny. It is rather the same temptation to get something for nothing that continues today to imprison the uninformed.

The problem is not with how much money is collected. The problem is not "tax cuts for the rich". The problem is a lack of fiscal responsibility and a federal power (both political parties) grab that institutes entitlement programs that it can't pay for along with "pork" spending for political gain. So the next time you hear about "the rich not paying their fair share", remember that it is simple class-envy lies made for political ideological gain. If it were not for job-creating "rich" people, we would not have jobs. The myth of tax cuts causing deficits, and rich people not paying their fair share, may tempt the mind of average people who feel it is unfair for others to prosper more than them, but there is not one shred of truth to it. No government or individual has an unalienable right to other people's property or money. America's Constitutional limited government principles call for the least amount of taxes necessary to fund the Constitutional mandated tasks of government and NO MORE! Socialism is anti-ethical to America's founding principles.

People must stop listening to the sound bites, and the emotionalism that billows out of those who are opposed to personal financial freedom. Theirs is a world of government domination and redistribution of wealth. This mindset only leads to more government power and less prosperity! It is covetousness that motivates the masses which allows the leftists to proclaim their Socialist nonsense. It is the fallen way of many to believe that anyone who prospers above them must be wealthy. There is a deception in many that makes them believe they have some right to that which belongs to another. This posture is jealousy, and makes it all the more difficult for the covetous one to attain what he deceived himself to believe is his right without personal sacrifice. Long live American freedom and that freedom will always include a person's right to work hard, invest and make more money than he or she "needs".

By Rev. Dr. David M. Berman Th.D. Click here for bio and archived articles