PrintDecember 4, 2010
The Unemployment Crisis Catch-22
The battle continues over private-sector job creation and government expansion. Taxation and unemployment are directly related, and if every American doesn't understand this, then Americans will continue to lose jobs.
The Democratic left has placed a gun to congressional Republicans' heads by threatening to allow taxes to increase on all Americans on January 1. Democrats intend to continue government expansion by again extending the policy of paying people not to work, while Republicans are threatening to block all leftist lame-duck initiatives barring tax breaks for every American, including "the rich."
The historical facts are quite clear on the subject: lowering tax rates always results in economic growth by leaving more investment resources in the private sector, where real jobs must be created. Lower tax rates have always resulted in increased tax revenue streams by way of economic expansion. So why are Democrats so committed to raising taxes?
The Democratic left is not really focused on economic expansion; they are focused on government expansion -- i.e., taking earned resources out of the private sector and placing them in the public sector, where they can dictate "social justice" from on high.
As the Bush tax cuts are due to expire on December 31, 2010, Obama threatens to raise taxes on all Americans in his pursuit of shifting more private wealth to the public sector. To justify the federal assault on America's employers, Democrats claim that "the rich" do not pay their "fair share" in America. This concept is sold to American workers as "social justice."
In short, if Republicans won't allow the Democratic left to further assault investors and employers on January 1, Democrats are prepared to penalize ALL Americans by increasing taxes on everyone at a time when unemployment is already at an all-time high and home mortgages are in deep trouble.
Tax facts are clear, though. According to I.R.S. reports, 70% of all federal income taxes collected are paid by only 10% of working Americans -- people making $113,000 per year or more. Every citizen should take a few moments to read the history of our tax system in order to fully understand what has been done to destroy American economic freedom and prosperity over the last hundred years.
By 1913, 36 States had ratified the 16th Amendment to the Constitution. In October, Congress passed a new income tax law with rates beginning at 1 percent and rising to 7 percent for taxpayers with income in excess of $500,000. Less than 1 percent of the population paid income tax at the time. Form 1040 was introduced as the standard tax reporting form and, though changed in many ways over the years, remains in use today.
In 1913, people making more than $500,000 in "income" (which did not include "wages" at all) were considered "the rich." Taxing "wages" was considered immoral, and therefore unconstitutional, at the time. My, how our morals and constitutional interpretations have changed...
But today, Democratic leftists tell us that everyone making more than $113,000 per year in "wages" is "rich." So the battle over further extending unemployment benefits is really nothing more than a continuing assault on the top 10% of "wage"-earners in America. Democrats are willing to raise taxes on everyone if they can't attack that 10%.
With the official unemployment rate hovering around 10%, and the real rate closer to 20%, addressing those who cannot find work is indeed a very important issue -- especially with extended unemployment benefits to run out for an estimated 2 million Americans between now and year-end.
But with the federal government debt at an all-time high and no end to deficit spending in sight, how we address this problem is critical.
Allowing the Democratic left to further assault those who invest and create private-sector jobs in America, even to pay for extending unemployment benefits, will exacerbate the jobless problem. We have been talking about a "jobless recovery" for months now. The rich won't invest or hire from under the threat of increased taxes especially for them.
A tax assault on the rich is a tax assault on the very people who spend, invest, and create jobs. Do we want to be paid not to work, or do we want jobs? We can't have it both ways anymore.
There is a term in our Constitution, "general welfare," which is a limitation on the federal government intended to force government to avoid passing legislation which benefits some at the expense of others. Government policies which attack some to benefit of others are by definition "unconstitutional."
Forcing 10% of wage-earners to pay even more than the 70% of income taxes they already pay can hardly be deemed a policy which treats all citizens equally under the general welfare restriction.
The American people are in charge here. If we want jobs, then we must stop the Democratic left from continuing their assault on the private earnings of private-sector job creators. But if we want something for nothing, then Obama's Chicago thug-style threat to increase taxes on all if they are not allowed to target job creators is the way to go.
Unemployed citizens are caught in a catch-22. If they call upon congressional leftists to continue their assault on investors and job creators, they may get another extension on unemployment benefits. They might even get tax cuts for the 50% of Americans who don't pay taxes to begin with.
But what they won't ever get is a job!
Author's note: As I finish writing this column, reports have come in that House Democrats rammed through their original tax hike on all job creators effective January 1, 2011, as if the 2010 election and meetings between Obama and Republicans never happened. Rep. Boehner reacts...but the people yawn!
