By now, we all know that the news continues to be saturated with talk of the latest Barry Hussein Obama meltdown–the ABC debate in Philadelphia at which, when questioned by Charlie Gibson and George Stephanopolous about his proposed tax-and-spend policies, he became what many would call deeply indignant and what others would call quietly outraged that he be questioned about something so near and dear to Liberal/Socialist hearts: the idea that the wealthy need to be screwed majorly, just for being wealthy.
Obama was taken to task by Gibson on his stated intent to raise the capital gains tax. What Gibson did was ask a simple and straightforward question:
"Actually Bill Clinton in 1997 signed legislation that dropped the capital gains tax to 20 percent. And George Bush has taken it down to 15 percent. And in each instance, when the rate dropped, revenues from the tax increased. The government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down. So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?"
Obama could only muster himself to splutter out that it’s a matter of "fairness", as (so far as he is concerned) raising the capital gains tax will disproportionately penalize the wealthy. (Apparently Obama doesn’t know the quite public fact that the 10% of the wealthiest Americans already pay 70% of the federal income tax all by themselves every year. Or, if he does about it, he feels that that is simply not "unfair enough").
Then he became coherent enough to recall the lies he has been spewing and said that raising taxes would raise federal revenues so that he could finance all of his proposed Socialist welfare entitlement programs, all the while paying down the U.S. national debt.
First off, it is these very entitlement programs that have created such a huge national debt. The Iraq War costs only about 25% as much as middle class-oriented entitlement programs.
Secondly, as I have previously written:
Steve Moore at the Wall Street Journal has calculated the cost of Obama’s tax plans, which he is finally beginning to give a little definition to. Moore has found that the plans will add up to a 39.6 percent personal income tax, an equal level of dividends tax, a 28 percent capital gains tax, a 52.2 percent combined income and payroll tax, and for the finale a 55 percent estate tax.
And that ain’t just on the wealthy.
Obama has derided the fond remembrance of Ronald Reagan and said that basically nothing President Reagan did worked.
This is very amusing, because what the Reagan Administration did was cut taxes…and, in cutting taxes, fill the federal coffers fuller than the malaise-inspiring Democrats that preceded him were able to do (and at the very same time as he enriched the government, Reagan enriched the American citizenry).
How was Reagan able to understand this would happen?
I submit that it was because Reagan knew the story of Led Zeppelin.
Now, dear reader, you probably would not know this, but time was that rock bands went out on tour and lost money. Yes. So why, from an economic point of view, did their recording label finance a tour?
Well, by touring in an age without illegal digital downloads available, rock bands promoted their latest album. If this promotion were successful, the album and airplay singles sales more than overcame the loss sustained on the tour.
But round about 1973, Led Zeppelin did something that almost no other bands of the time were able to do (Deep Purple could perhaps also pull this off at that time), and in so doing this Led Zeppelin set the stage for what would become the glorious years when rock bands would make money on tour.
You see, dear reader, Led Zeppelin had a manager named Peter Grant. Peter Grant was a very large man and a former wrestler, and he realized one morning that he was now the manager of the biggest band in the world. There was no question that Led Zeppelin was going to sell out every stadium that it came to.
So Peter Grant began renegotiations of the revenue sharing contracts that Led Zeppelin had with the venues on its tours.
Peter Grant informed those venues that from now on Led Zeppelin would take 90% of all revenues made from ticket sales and other sales at the concerts. Anyone who did not like this would find that Led Zeppelin would simply not play at their venue.
This was shocking, because it had been precisely the other way around. Until now.
But after some wringing of hands, the venues agreed to the new deal.
You see, dear reader, the venues did not take long to figure out that 10% of Led Zeppelin was better than 90% of nothing.
And that was the economic principle that Reagan applied to fill the federal coffers while simultaneously putting more money in the wallets and accounts of Americans.
He understood that when people are taxed less, they both consume and invest more–not only because they have more to work with but at once because they have more confidence. There are taxes collected on consumed goods and there are taxes collected on earnings from investments.
And you see, dear reader, 15% of $100,000 is much more than 28% of $10,000.
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