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Increasing Taxes On “The Rich.”

You hear it all the time.

The way people want to pay for new programs or increased spending is to “tax the rich.”

After all, to many as long as their taxes aren’t going up, what do they care?

Turns out, the rich don’t have enough money to pay for the proposed programs and increase in spending.

Taxing high earners at 100 percent of their income would pay for about one third to just over half of the extraordinarily ambitious “progressive” or socialist programs supported by democratic socialists Sen. Bernie Sanders (I-Vt.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.), a new Heritage Foundation study found. Even a full confiscation of all incomes above $200,000 and a confiscation of all corporate profits would still fall $13.2 TRILLION short of paying for the low estimate for Medicare for All and the Green New Deal.

“It is arithmetically impossible to pay for progressive promises by ‘taxing the rich,'” David Burton, Heritage’s senior fellow in economic policy, wrote in the study. “Progressive promises are too expensive—and the amount of income earned by the rich is too small. Even using lower cost estimates, confiscating every dollar earned by every taxpayer with incomes of $200,000 or more would only pay for about half of the progressive agenda.”

The numbers are not rosy.

According to the Congressional Budget Office (CBO), without any change to current law, America will spend $57 trillion in the next ten years (about 22 percent, or $12.4 trillion, will be financed by debt). Single-payer health insurance would increase federal spending by $32 trillion to $33 trillion over the next ten years. The Green New Deal, jobs guarantees or a universal basic income, government-funded college tuition, and more would cost trillions more. Heritage estimated a ten-year total cost between $48 trillion (close to the PJ Media analysis of $49.109 trillion over ten years) and $92 trillion (close to the American Action Forum estimate of $93 trillion) for all programs.

Just Medicare for All would increase federal spending by 58 percent. The low estimate for the Green New Deal suite of socialist programs would increase that spending by 84 percent — the high estimate by 161 percent.

[….]

From IRS data, Heritage predicted that a 100 percent flat tax on those with incomes of $1 million or more would only raise $986 billion per year. This would not even eliminate the annual federal deficit, about $1.1 trillion. This also does not consider federal payroll taxes, Social Security taxes, Medicare taxes, or state and local income, property, and sales taxes — all of which would drive the number even lower.

Confiscating all after-tax income of those making $500,000 or more would increase federal revenues by about $1.4 trillion per year — enough to eliminate the federal deficit but not much more. Tax confiscation of all incomes of those earning $200,000 or more would add $2.7 trillion to federal revenues — but again, this does not take various other taxes into account.

So all those plans that sound great come with the fairy tale idea that they can all be paid for by “taxing the rich.”

That then begs the question, “who would pay for these programs?”

The middle class of course.

“The only arithmetically possible answer” to pay for the progressive agenda is “that the progressive agenda must be paid for by radical increases in the tax burden borne by middle-income taxpayers or dramatic increases in federal borrowing,” Burton wrote. Federal borrowing is already astronomical and unsustainable. Going even further into debt for the socialist/progressive agenda would only speed up the day of reckoning. The debt crisis would certainly hit the middle class.

So the next time a Democratic presidential candidate promises the moon and says taxing the rich will pay for it, tell them that in even the most impossible Goldilocks tax scenario, all the taxing in the world will only pay for 72 percent of the Green New Deal for 10 years.

Take for example, the “New Green Deal” that has been proposed.

According to a new study, the Green New Deal’s implementation would cost the average American family a quarter of a million dollars during the first five years. The costs are even higher for Americans living in Alaska. The study did not even take into account significant parts of the Green New Deal, since they are impossible to calculate. After all, Rep. Alexandria Ocasio-Cortez (D-N.Y.) hasn’t even introduced an actual bill, but only a resolution calling for future bills. It’s less a concrete plan and more a worldview statement justifying hundreds of future laws.

The study, jointly co-authored by the Competitive Enterprise Institute (CEI) and Power the Future (PTF), analyzed the additional electricity demanded for various projects like decarbonizing the economy; the costs associated with shipping and logistics; the costs of new carbon-free vehicles; and the costs to retrofit every building in America. Just these four types of costs would add up to more than $250,000 per household in the first five years, a conservative estimate.

[….]

CEI and PTF analyzed the estimated costs for households in five states — Alaska, Florida, New Hampshire, New Mexico, and Pennsylvania. In every state except Alaska, the Green New Deal would cost a typical household more than $70,000 in the first year of implementation, approximately $45,000 for each of the next four years (adding up to $250,000 for the first five years), and more than $37,000 each year after that. In Alaska, the average family would pay more than $100,000 in the first year, $73,000 for the next four years, and more than $67,000 each year afterward.

One quarter of a million dollars for the first 5 years, per US household.

If your household can afford that, you are doing much better than the rest of the country but that won’t last too long as the “tax the rich” people want 100% of your income.

There seems to be a disconnect between people who run for office at every level of the government who campaign saying “I won’t vote for any new taxes” and when elected, they advocate spending more and more as if there is some magic money printing machine that people keep in the basements or garages.

Years ago we heard the joke about the woman who called up her bank as she was agitated. She had received a notice of a bounced check and wanted to know what happened.

The manager of the bank explained that the woman had no money in the account upon which she was writing the checks.

“Whaddya mean there is no money? How can that be?!?!” the woman yelled. “I still have checks!”

“Whaddya mean the people can’t pay the taxes! We still are in session and have to pass spending bills!” will be the cry from elected officials.

All we can say is that we know that the US has a spending problem which leads to a taxation problem. We are constantly amazed at local officials touting a grant or something from the State or Federal government as if the money didn’t come from the taxpayers in the first place. We actually sat in a meeting once where an elected official claimed that the grant for a pet spending project of his was “free money.” No one said a word to him about that false assumption.

The bottom line is that people need to know and remember that when they hear politicians say “we can increase the tax on the rich,” what they are really saying is “the people are so stupid they won’t realize until it is too late that we are going to have to tax them as well!”



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