Friday, October 12, 2012

Joe Biden: Completely Wrong On Taxes and Taxation

In last night's debate, Joe Biden also said the Obama Administration wants "Millionaires" to "take some responsibility."  Now, while you clean up the coke or coffee you just spit all over your keyboard, I think it's a good time to point out that the White House has disavowed this comment, too.  Or, perhaps, they're recontextualizing it.  See, they do only want to tax millionaires, if you define "millionaire" as "someone making $250,000.00"

So, there's that lie.  But there was so much wrong with everything Biden was saying that there's almost too much.  I'll get through as much as I can.

Besides that lie, there was this one "The only way to close the $5 Trillion dollars is to raise taxes on the middle class."  Ryan actually tried to rebut this and was continuously interrupted by Mr. Biden (almost as if he knew what he'd said was, in his own words, "Stuff.") and then cut-off by the Moderator.  But the point is this.  When you lower tax rates you increase revenue.  You do that two ways.  The first is that you get more rich people in the first place.  That is, people who are nearly rich make it all the way to rich, and they start paying more in taxes.  The second is that you broaden the tax base generally.  As the "rich get richer" (as though that were somehow bad), they spend more money.  In aggregate, they spend oodles and oodles of money.  That oodles and oodles of money filters through the economy, and eventually turns into more jobs.  More jobs means more people employed.  More people employed means more people paying taxes.  You avoid raising the tax rates on the middle class, because there are more people in the middle class.  No one's personal share goes up, because there are more people contributing.

Third was the statement that "97% of Small Businesses in the US make less than $250,000.00."  This has several problems.  What he's trying to suggest is that taxing the "small businesses" that make more than $250K at a higher rate isn't bad because there are so many other businesses making less than that.  The problem with that idea is that it conflates "small business" with "job creator."

It is true that most jobs in this country are created by small businesses, but it is a logical fallacy to believe that means that each small business creates the same number of jobs.  In reality, if you are a business owner and your "small business" makes less than $250K/yr, you probably don't have any employees.  Let's look at what having a single employee requires: first off, there's all the regulatory paperwork and compliance.  That costs lots of money.  You have to have a facility where they can work (say goodbye to working in your jammies).  That costs lots of money.  Then you still have to pay yourself.  Unless you're already rich, you're probably not paying yourself less than your employee.  So to afford all of that, you're probably making at least $250,000.00 per year.

The simple fact is that any place that Joe Biden was not lying about Taxes, taxation, and the economy, he was simply wrong.

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