Jerusalem Pulse Radio Streaming mp3 news and commentary

The Invincible Lie: Part II

Posted on: Jul13 2012 | Leave A Comment

Nothing produces more of a sense of the futility of facts than
seeing someone in the mass media repeating some notion that has
been refuted innumerable times over the years.

On July 9th, on CNN’s program “The Situation Room” with Wolf
Blitzer, commentator Gloria Borger discussed President Obama’s plan
to continue the temporary extension of the tax rates established
under the Bush administration — except for the top brackets, where
Obama wanted the tax rates raised.

Ms. Borger said, “if you’re going to lower the tax rates, where
are you going to get the money from?”

First of all, nobody is talking about lowering the tax rates.
They are talking about whether or not to continue the existing tax
rates, which are set to expire after a temporary extension. And
Obama is talking about raising the tax rate on higher income
earners.

But when Ms. Borger asked, “where are you going to get the money
from?” if you don’t raise tax rates, that assumes an automatic
correlation between tax rates and tax revenues, which is
demonstrably false.

As far back as the 1920s, a huge cut in the highest income tax
rate — from 73 percent to 24 percent — led to a huge increase in
the amount of tax revenue collected by the federal government. Why?
Because investors took their money out of tax shelters, where they
were earning very modest rates of return, and put their money into
the productive economy, where they could earn higher rates of
return, now that those returns were not so heavily taxed.

This was the very reason why tax rates were cut in the first
place — to get more revenue for the federal government. The same
was true, decades later, during the John F. Kennedy administration.
Similar reasons led to tax rate cuts during the Ronald Reagan
administration and the George W. Bush administration.

All of these presidents — Democrat and Republican alike — made
the same argument for tax rate reductions that had been made in the
1920s, and the results were similar as well. Yet the invincible lie
continues to this day that those who oppose high tax rates on high
incomes are doing so because they want to reduce the taxes paid by
high income earners, in hopes that their increased prosperity will
“trickle down” to others.

In reality, high income earners paid not only a larger total
amount of taxes after the tax rate cuts of the 1920s but also a
higher share of all the income taxes collected. It is a matter of
record that anyone can check out with official government
statistics.

This result was not peculiar to the 1920s. In 2006, the New York
Times reported: “An unexpectedly steep rise in tax revenues from
corporations and the wealthy is driving down the projected budget
deficit this year.”

Expectations are in the eye of the beholder. Tax cut proponents
expected precisely the result from the Bush tax cuts that so
surprised the New York Times. So did tax cut proponents in the John
F. Kennedy and Ronald Reagan administrations.

If this concept has not yet trickled down to the New York Times
or CNN’s Gloria Borger, that is a commentary on the media
commentators.

Ms. Borger may simply not know any better, but Barack Obama
cannot use that excuse. When he was a candidate for president back
in 2008, Charles Gibson of ABC News confronted him with the fact
that there was no automatic correlation between the raising and
lowering of tax rates and whether tax revenues moved up or
down.

Obama admitted that. But he said that he was for raising tax
rates on higher income earners anyway, in the name of “fairness.”
How higher tax rates that the government does not actually collect
make any sense, whether from a fairness perspective or as a way of
paying the government’s bills, is another question. The point here
is that Obama knew then that tax rates and tax revenues do not
automatically move in the same direction.

In other words, he is lying when he talks as if tax rates and
tax revenues move together. Ms. Borger and others in the media may
or may not know that. So they are not necessarily lying. But they
are failing to inform their audiences about the facts — and that
allows Obama’s lies to stand.

COPYRIGHT 2012 CREATORS.COM



Comments are closed.

Jewish Pulse Radio Streaming mp3 news and commentary


simple to remember

YidMatch

yadvashem

simple to remember

At Home in Israel

Advertise Here!
SUPPORT JPR  |   WORK FOR JPR  |   CONTACT US

Copyright © 2014 Jewish Pulse Radio All Rights Reserved | Web Design by terrytoledo.com | Log in | Entries RSS | Comments RSS | Top ⇑ | Sidebar ⇒

DISCLAIMER: While it is the goal of all JPR staff to bring you only unbiased facts, it is our belief that no one can truly be 100% objective. Therefore, all opinions expressed by this host/instructor do not necessarily reflect those of fellow hosts, instructors or the JPR senior staff. However, we believe what sets us apart is our cohesive willingness and need to correct ourselves if it is discovered that any of our reports have been anything but 100% accurate.