Showing posts with label fiscal cliff. Show all posts
Showing posts with label fiscal cliff. Show all posts

Sunday, December 02, 2012

After Dancing Long and Well, It’s Time to Pay the Piper

It’s absurd to maintain tax cuts for the wealthy when the country faces massive debt and many of its citizens are unemployed. By now, most of us realize that prosperity does not trickle down from the wealthy, and never did.

It’s argued, however, that increasing taxes for the wealthiest citizens may result in lost jobs. But it’s also argued that the resulting reduction in the federal deficit will more than compensate for those lost jobs. Further, it’s not certain that job losses will occur since businesses are running on minimal staffs already. After Clinton raised taxes, the economy thrived, so it’s entirely possible that the effect of tax increases for the wealthiest may have no, or only minimal, effect on job losses.

Alternatives that include reducing entitlement funding will also increase the hardships already faced by entitlement beneficiaries. As for cutting federal spending, we all know that Republicans never actually follow through with such reductions despite their talk. To do so would result in lost jobs for federal employees and for those who supply the government with goods and services. Clearly not an acceptable alternative.

During the Eisenhower years and beyond, affluent Americans paid much higher taxes than they do today. The country prospered and employment was strong. Currently the wealthiest citizens hold a greater percentage of America’s wealth then they ever held previously resulting in record levels of income inequality. Yet does all this capital in so few hands result in economic growth? Not at all. In order to bring economic growth, capital needs to be moving, not sitting stagnantly in the hands of the elite. The United States does not have a royal class, yet the desire to worship royalty remains present in those who seek to protect it from imaginary threats.