Diary

Who Wants to Tax a Millionaire?

Secretary of State Hillary Clinton recently told an audience at the Brookings Institute that she thinks, “The rich are not paying their fare share,” in taxes. She believes that, on account of the high unemployment rate, the rich should be contributing more, “whether its individual, corporate, or whatever taxation forms.” She went on to add that she was not speaking for the administration but rather was merely expressing her own personal convictions.

Now I happen to like Secretary Clinton. I admired the toughness and tenacity that she exhibited in the Democratic primary season and the frankness that she brought to the campaign trail. I thought she was far more competent and experienced than Senator Obama, and to this day I maintain that I would much rather see her in the White House than the current occupant, who clearly was woefully unprepared for the job.

However, as much as I like Secretary Clinton on a personal level, there is no phrase in the English language that infuriates me more than “It’s time for the wealthy to pay their fair share.” I cannot stand these words, nor can I help myself from launching a tirade at whichever unfortunate soul utters them. The phrase angers me because it betrays a complete and total ignorance for the current state of affairs in this country with regard to taxation, and further, it demonstrates that the speaker has no knowledge whatsoever of even rudimentary economics.

Perhaps someone should inform Ms. Clinton that the top 5% of individuals in the United States pay almost 60% of all income taxes, or the top 1% pay a shocking 25%! Meanwhile half of all individuals pay no income tax at all. Now does that sound like the rich need to be picking up the slack? I don’t think so. What’s more, it is clear that Ms. Clinton has never heard of Hauser’s Law, despite it being widely publicized in the Wall Street Journal (though it hardly surprises me that the Clinton family does not subscribe to this particular newspaper).

Hauser’s Law has observed that, no matter what the top marginal tax rate has been in the United States, government revenues have always equaled about 19.5% of Gross Domestic Product. Secretary Clinton, President Obama, Speaker Pelosi, and many other Democrats would have us believe that raising income taxes on the wealthy will generate more revenue that can be more equally redistributed among less fortunate individuals. Laying aside the ridiculous nature of this idea, it is a complete and utter fantasy. As Hauser’s Law has demonstrated, the only way tax revenues will rise is by increasing GDP. And what is the fastest way to ensure that never happens? Impose oppressive rates of taxation, particularly on the wealthy who are responsible for job creation.

So Secretary Clinton, while you may think that the wealthy need to pay more in taxes, the evidence is suggesting otherwise, and you just look foolish. I could get into a tirade about how the so-called “progressive income tax” is actually the most blatantly unfair aspect of our government, but I will content myself with demonstrating your complete ignorance about even some very basic economic concepts. Raising taxes on the wealthy would be foolish, unjust, and would ultimately hurt the very people you are trying to help.

Maybe it’s a good thing she didn’t win?