PrintSeptember 22, 2010
It's about Greed, All Right -- Government Greed
A friend of mine asked a rhetorical question the other day. Caught me up short, I'll tell you. I'd never heard it put quite that way, and I had to ponder it. He asked, Why does the Left love jobs -- but hate employers? Oh, they'd never cop to it, but that's what it amounts to.
Think about it. When they speak disparagingly about "tax breaks for the rich," they're usually talking about tax incentives for those who are in a position to hire people. (Ever get a job from a poor person?) Think of "The Rich" as code language for employers, and see how those put-downs sound to you when you plug the word employer into such a remark the next time you hear one.
Once, years ago, while I was living in a canyon and had some time to myself, a dog of mine birthed a litter, and instead of just giving away the pups at eight weeks, as I'd normally have done, I decided to raise and train them myself -- while studying, among other things, their behavior as a group. (I learned quite about myself, as well, in dealing with my reaction to them -- but that's another story for another day.)
I watched the way that -- since the mother wasn't separated from the pups at the usual point of development -- they continued for a while, expecting to nurse, even though I made solid food readily available to them. They quickly reached a size that required the mother to actually stand up to accommodate them. (Recall that famous Etruscan bronze sculpture in the Capitoline Museum in Rome of Romulus and Remus being suckled by a standing she-wolf?) Eventually their nutritive demands became so extractive that for her to let them continue longer than a moment or so at a feeding session would apparently take too great a toll on her bodily vitality for her to tolerate it.
So she would just walk off, even while they were nursing. These burgeoning balls of fur would fall over and try chasing her down the hill -- till she made clear to them that the rules had changed.
I recalled that little tale to illustrate a point. Half of all those individuals included in the income category of "$200K or more ($250K for married couples)" -- whom the president and Demo-dominated Congress want to tax -- are small-business persons, whose total business income has to be reported on their personal tax return.
Again, these are often not "mega-corporate" types, but rather small business owners responsible for hiring the bulk of Americans. It's these small-business folk who will be hit hardest if the Bush tax cuts are "allowed" to expire on January 1 -- an expiration which will most certainly kill the recovery, drive a stake right through its sluggishly struggling heart.
It seems that there are those who have actually given themselves the idea that each of these so-called "wealthy" individuals is wearing a sign that reads,
You are looking at a cash cow.
Step right up, you "swarms of [Internal Revenue] Officers...sent hither...to harass our people, and eat out their substance"[1]: climb on board, latch onto a nipple, and suck. Suck as if your job depended on it.
Because it does.
Yet for all we know, that business owner may, in fact, be putting in long hours and denying himself a salary (to say nothing of vacation time) -- and even skimping on his personal expenses -- in order to plow every penny of profit back into the business, just to keep the operation afloat. (I once had a boss who, I found out, had sold his only car to meet a payroll.)
The looming reality is that if we make it less than appealing for small business owners to do business and expand where they are, then not only will they not be able to add new hires -- that goes without saying -- but also, a lot of them will simply take their action and/or themselves elsewhere, if only to keep from being forced out of business altogether. And that needs a lot of saying.
Perhaps you'll recall that the adage "a rising tide lifts all boats" did not come to us from some gaggle of "Robber Barons" seeking a veneer of moral cover to justify their voracious appetites for industrial plunder. No, actually, the expression found its way into the popular culture courtesy of a sailor (and a Democrat at that): a former naval officer named Jack Kennedy, who, as president, was determined to cut taxes. He didn't live to see the actual implementation of the Revenue Act of 1964 -- but it clearly had the consequence of boosting a sluggish economy.
And when a former Roosevelt Democrat, a certain Ronald Reagan, entered the Oval Office as president, his decision to enact a 25-percent, across-the-board cut in personal marginal tax rates during the eighties was informed, in part, by his own study of the Kennedy tax cuts -- as well as the 1920s Coolidge tax cuts, which (linked to reductions in federal spending at the time) had facilitated the retirement of a quarter of the then-existing national debt. By 1989, the Economic Recovery Tax Act (ERTA) -- the Reagan tax cuts of 1981-- had nearly doubled annual individual federal revenues [2].
Of course, Congress spoiled things by using those revenue increases as an opportunity to spend themselves silly -- and then, too, our military strategy required out-spending the Soviets on armament (and it worked -- put the USSR out of business)...but you get the point.
The truth is that small business is not a cash cow -- it is the goose that lays the golden eggs. Killing it by draining its resources is as good as cutting off our nose to spite our own face, because it drives business (and with it, jobs) toward greener pastures. (In their shoes, what would you do -- just stand there and let government suck you dry?) How stupid does stupid get?
But that's not the half of it: If taxes rise on big business -- dividends and capital gains -- the net effect of this penalty on investment will be reduced investment and still more outsourcing of jobs to overseas locations. Their boards of directors are responsible to their shareholders to maximize their company's or corporation's profits (that is commerce's very raison d'être), so what would you expect them to do?
The U.K. had extortionate tax policies until the prime ministerial advent of Maggie Thatcher (1979-90), whose economic reforms included (among other things) a reduction in direct taxes on personal income and cash limits on public spending. Until then, however, what was the point in busting a gut, putting in the time, struggling with agents and managers and reporters and rehearsals and schedules -- and yes, knocking down massive wads of "quid" -- only to stand there doing a slow burn while Her Majesty's Revenue & Customs (HMRC -- Britain's own version of the IRS) walked off with the lion's share of it?
What this current administration (and its pocket, Congress) is really doing is pigging out on the substance of the most economically productive elements of this society. "The American people," thunders the Anointed One, "will not excuse or tolerate ... arrogance and greed"[3]. Well, he's got that right -- though maybe not the way he intended it. The corporate bankers he was denouncing are certainly an easy enough target. Yet I think much of his talk is also actually personal, and partisan, projection: The real problem here is government greed.
The president and this Congress spend like the proverbial "drunken sailors on payday shore leave" -- for their ideologically compulsive, social engineering projects -- and then they think they can fund the crazy shopping spree by sinking a tap into those who generate the substance of this economy. But that reminds me of something: I've heard it said that
- Bulls make money, and
- Bears make money.
- Hogs...make bacon.
Keep it up, Mr Wonderful. Our breakfast date for Wednesday, November 3 is looking tastier all the time.
Michael Zebulon was once the youngest Eagle Scout on the eastern seaboard. Actor, narrator, writer -- he remains an Eagle Scout (there are no "former" ones), but is no longer the youngest. Contact him at m_zebulon@yahoo.com.
[1] Declaration of Independence, "Adopted In Congress, 4 July 1776; The Unanimous Declaration of the Thirteen United States of America," par. 13.
[1] Declaration of Independence, "Adopted In Congress, 4 July 1776; The Unanimous Declaration of the Thirteen United States of America," par. 13.
