So much for the Republican ideal of no new taxes. House Majority Leader Eric Cantor has tossed out for discussion the idea of having the 45% who are too poor to pay income taxes begin to pay them. That would allow the 55% who do pay income taxes to lower their taxes. Cantor tries to dodge around specifically stating that but that is what he is saying.
Just because some people don’t pay income taxes doesn’t mean they don’t pay taxes. Cantor and others are suggesting because these people don’t pay income taxes, then they don’t have any skin in the revenue game. In 2010, 42% of the federal revenue came from income taxes. Forty percent came from payroll taxes like Social Security. That’s plenty of skin for those who aren’t making much money. Payroll taxes are a big tax break for the wealthy anyway. Payroll taxes top off at a little over $100,000. Those who make hundreds of thousands or millions in income have the bulk of their income shielded from these taxes. True, their benefits are capped as well, but that’s no different from how money from the income tax is spent. The wealthy aren’t going to collect food stamps or other safety net programs that there income taxes pay. Why should it be different for payroll taxes?
Cantor continues with the fallacy that the wealthy are job creators. There isn’t an employer in this country who wakes up some morning fancying “I think I’ll create some jobs today.” It doesn’t work that way. People who start businesses are looking for investments. They are looking for ways to make money. There is absolutely nothing wrong with that. Jobs are created only as a tool to make money. That’s the way it has been since the first farmer scratched some dirt in Mesopotamia and planted some crops.
Jobs are created by demand. Demand comes from the consumer. The consumer can be rich, middle class or poor. With demand, the investor takes a leap into economic opportunity. Taxes can be reduced to zero for a wealthy investor, and that person is not going to spend a dime to create a job unless there is demand or perceived demand. Cantor and the rest of his allies need to get off their philosophical fantasy that lower taxes create any significant amount of jobs. They don’t. Lower taxes may create demand, but that applies to the poor as well as the rich.
Cantor thinks that the 45% who are not paying taxes and needing social programs to survive should pay income taxes. That means they are going to have less money to spend on essentials. Their quality of life will go down, the burden on government will grow as will social unrest and whatever remains of the American Dream will be flushed right into the sewers.
Trickle down does not work. Trickle up does. America hit its great period of prosperity in the 1950s and 60s when the middle class was growing. The more the poor can be lifted out of poverty, the more money they have to spend and the more the opportunities for the wealthy to invest and increase their fortunes.
Cantor is proposing class warfare when the real battle should be providing opportunity. It is sickening to suggest tax breaks for the wealthy while hinting at tax increases for the poor. Marie Antoinette would love this guy.