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Monday, September 10, 2012

If Barack Obama's own economic adviser is saying the optimum tax rate for collecting government revenue is 33% of income, why is Obama pushing for higher tax rates?




Protein Wisdom asks what is motivating Barack Obama and the Democrats to push for a higher tax rate that will actually result in less revenue for the government?

The truth is the looming unfunded debt of social security, Medicare and Obamacare, dwarfs any revenue that could be obtained from taxes.  These entitlement programs cannot by sustained by raising the marginal tax rate.  It is not mathematically possible.  We do not have a taxation problem, we have a spending problem (see the graph below).  And talk of raising the tax rate for fairness, which is only fair if you think forced  income redistribution is fair (before the whole system collapses eventually under the gravity of this debt) is just that, talk. This really is about appeasing Democrat base voters who want more benefits without paying for them. But as Margaret Thatcher said: The problems with socialism is you eventually run out of other people's money. And these entitlement programs, without reform, will run out of money.

Update:
How is raising taxes working out in France?
Mark Steyn notes how much it cost to educate Sandra Fluke...


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