John Hinderaker at Power Line posted an article yesterday about President Obama’s claim that he plans to pay down the debt in a balanced fashion–increasing taxes on the wealthy to increase revenue and reduce the deficit. Aside from the fact that it is historically proven that raising taxes does not increase revenue, there are some definite problems with that approach.
This is a picture of a concept called the Laffer Curve:
As the illustration states, 50% is not necessarily the ‘magic number’–that number could be anywhere. The best real life illustration of this principle is the migration of millionaires out of Maryland after the tax on millionaires was increased (see rightwinggranny.com). People who will be impacted by large tax increases on the upper middle class (no–they are not ‘the rich’) usually have the means to shelter their wealth from the tax man (check out the financial disclosure statements of some of the Kennedy’s running for office).
The article at Power Line shows a graph of what President Obama’s budget plan will actually do for the deficit. The graph is based on figures from the Office of Management and Budget (OMB):
As voters, we need to be aware of the consequences of another four years of President Obama’s economic policies.