Monday, December 3, 2012

Taxes Won't Matter

At the end of the day, it really doesn't matter what happens to taxes.  There is no tax policy that can catch up with the entitlement promises.  The only reason that taxes matter is the impact on economic growth and the answer to that is pretty simple. Higher taxes mean lower economic growth.

We are headed for bankruptcy as a nation, regardless of what happens to the Bush tax cuts.  Double all current tax rates and revenues and even that doesn't help.  We have a $ 66 Trillion unfunded medicare deficit.  A trillion here or a trillion there in tax revenues is completely irrelectant.

So, why is the media so focused upon whether or not Republicans will agree to an increase in tax rates.  Whether or not the Republicans cave only matters for economic growth.  It is completely irrelevant to the issue of looming fiscal bankruptcy.  If Republicans cave, we get lower economic growth, but no tax rate policy solves the nation's future bankruptcy.

The Obama folks are bound and determined to lead the US into bankruptcy. That's why taxes are the only subject up for discussion for them.  The media is their Greek chorus. They know, and anyone remotely familiar with the numbers knows, that revenues are irrelevant.

Here's one policy that I would support.  Let's take everyone with net wealth in excess of $30 billion and tax half of their wealth.  That would catch Buffett and Soros and all of the left wingers who know they have nothing to fear from an income tax.  You wonder if Buffett and Soros would be so sanguine about taxes if they knew they might have to pay some themselves.