The Myth of Tax "Breaks" and "Taking Away" Unemployment Compensation

As predictably as credit card bills after Christmas, Democrats are ranting over extending the Bush-era tax rates, falsely claiming that to do so would be to “give” a “tax break to the rich.”  They are wrong of course, as liberals invariably are when it comes to anything remotely related to finance and taxes. They seem incapable of understanding that cuts in tax rates for ANYONE is good for the economy, and in fact, reducing taxes on the HIGHEST earners is even better for the economy, which ends up benefiting everyone.

Besides, whether tax rates are kept where they are currently, or lowered even further (as savvy economists recommend), reducing tax rates is never a “gift” to anyone – what occurs is merely that less of THEIR OWN money was taken by the government. Anyone with an ounce of common sense knows this. After all, if your “take home” pay goes up $25 because of a cut in your income tax rate, do you light a candle in thanks to the Federal government for the “gift” you received? Of course not. You rightly see that the government didn’t “give” you anything – they are simply taking less of the money YOU earned.

Aaah, but when those “rich guys” who make so much more than they do get a similar reduction in the (much larger) amount they pay, then those who are prone to jealousy suddenly see THAT person’s  tax reduction as a “break” – made all the more believable with socialist Democrats shouting the same “class envy” message.

Then there is that “third rail” issue of Unemployment Compensation. Here, liberal Democrats use exactly the opposite “logic” from their misguided tax views – they talk about how horrible it would be to “cut off” benefits at Christmas, or that not extending benefits further (already up to an astonishing 2 YEARS), is somehow “taking away” something from the unemployed. But just as with the Minimum Wage (which inevitably ends up costing jobs) too many fall for emotion-laden rhetoric over cold, harsh reality.

By the way, if you have any doubt about how utterly clueless liberal Democrats are about economics, note that soon to be unseated Speaker Nancy Pelosi said, with a straight  face (no Botox jokes please), that “extending Unemployment Compensation will create jobs” – that’s right, she actually contends that paying people not to work will…get more people to work. Never mind that even ultra-socialist countries like Denmark have cut back their own programs, after discovering that the longer people got a check, and the higher amount of  the check, the less likely the recipients were to accept a job. Gosh, who’da thought?

But  paying someone to NOT work is, in truth, just another social welfare program – taking money from those who earn it and giving it to those who don’t. You have no “right” to unemployment compensation. If your favorite uncle sent you a check for $100 every year for your birthday, and then, after losing his job, stops sending you the check, you haven’t had anything “taken away” from you. Because it was never YOURS in the first place.

Republicans, unfortunately, still haven’t learned how to deal with the rhetorical attacks by liberal Democrats – they persist in using sober, rational economic arguments – economically sound, but boring. With a few exceptions (like Governor Chris Christie), Republicans have also not yet exhibited the kind of backbone that voters are seeking.

So while we can hope that Republicans might actually stand firm on maintaining current tax rates, they will likely cave in on extending Unemployment Compensation. To do so will appeal to those getting the checks, but, like applying a temporary pain killer to a toothache instead of filling the cavity, it only makes the inevitable “root canal” that much more painful.

Whether using class envy rhetoric to financially loot the nation’s job creators, or attempting to buy votes from the unemployed with yet another government check, liberal Democrats are proving why they were routed in the last election – and why they should remain a minority party for the foreseeable future.

John Caile