abaleh, if you’re still on here, I have another response for you from last night:

re: #152 abaleh

Last night I had a political argument with a friend of mine revolving around the Messiah. The guy worships the 0 and is in love with his rhetorical skills and the fact that he says what he’s going to do, unlike most politicians. I was able to throw out some strong points about the stupidity of his economic plans, but if anybody can provide me with links to send to him that explain why taxing the rich is futile as a long term plan, why bailing out companies such as the automakers is in essence nationalization with all its inherent shortfalls, &c, I would appreciate it.

Taxing “The Rich”

Obama is trying to get tax hikes on “the rich” through Congress to pay for all his promises to other people. But his simplistic Leftist worldview seems to have prevented him from seeing who the people are whom he proposes to tax more. Who are the people earning over $250,000 a year whom Obama wants to hit? Income is a sort of a pyramid. There are a few very rich people at the top but most of “the rich” whom Obama wants to tax are near the base of the pyramid: fairly close to that $250,000 mark. And most of them are hard-working people: doctors, dentists, businessmen and professionals generally.

So will they just pay the extra tax and grin and bear it? If the tax increase were limited to paying 39.6% instead of 33% on any income above $250,000, those just over the mark might not think the change worth bothering about — and sneering Leftist Jonathan Chait makes that point. But Chait fails to acknowledge that there is a lot more to Obama’s tax proposals than the new top rate. Obama also wants to cut out a lot of tax deductions available to those earning over $250,000 and he also has proposed increasing their tax rate on capital gains and dividends from 15 to 20 percent. So many professionals will take a fairly big hit if they carry on as before. So lots of them will reorganize their affairs so that Obama gets exactly nothing extra from them.

[…snip…]

So Obama’s increase in the tax rates could well bring about not an increase but a REDUCTION in the amount of tax revenue received.