Landrieu, who appears to be a millionaire and whose spouse does well in law and real estate, spared little vituperative enthusiasm in criticizing the deal made between Pres. Barack Obama and Democrat and Republican congressional leaders that would extend for a couple of years tax cuts for all income-producing Americans. Her anger came over giving those who make a million or more bucks a year the same break, who constitute less than one percent of all filers and who pay around a fifth of all income taxes – more than about the bottom 80 percent of filers.
Why she has such acrimony over fair treatment of those who foot her salary in great disproportion can be inferred from statements such as to her deal meant to “borrow $46 billion from the poor, from the middle class, from businesses of all sizes” and that to relieve the crushing burden on these million-dollar earners was “moral corruptness.” The sheer hypocrisy and vapidity of these remarks deserve further scrutiny.
It would appear that the “borrow” phrase to her means that would be the initial estimated forgone revenue as a result of not raising income taxes on million-dollar earners beginning next year. How she thinks this can be “borrowed” from the poor is gibberish as they, by definition, don’t have those funds, how the federal government would “borrow” from the others is unclear, and she seems unaware that many in small business are precisely those earners she would prefer to punish. Perhaps she means it would be money that could be spent on them in the form of government programs and benefits; in others words, the government would have to borrow $46 billion more without the projected initial revenue.
But since when has Landrieu cared at all about federal government debt? She gleefully has voted for record- and back-breaking Democrat/Obama federal deficits, and even before then went along with the milder (but, before Obama, record) Pres. George W. Bush deficit spending. To object now to a conjured figure that represents less than 6 percent of the 2009 spending bill Landrieu supported that did next to nothing to aid in economic growth is the height of hypocrisy.
Add to that Landrieu’s lack of understanding basic economics. As empirically confirmed, tax reductions have the most salutary effect on economic growth for all in an economy, with a multiplier of anywhere from three to five times in economic output. Thus, it should not be long before the $46 billion figure assumed from a static analysis of tax revenues disappears through the reality of dynamism that typifies free markets and free individuals’ decision-making processes, mainly because the wealthiest filers themselves pay for most of it.
That’s because this multiplicative effect of tax cutting also has the interesting effect of increasing the proportion of taxes paid by the wealthiest earners. For example, in 2001 before the Bush tax cuts the highest one percent of filers paid about 34 percent of all federal income taxes while by 2008 they paid 38 percent, compared to the lowest 50 percent who paid four percent in 2001 which fell to below three percent by 2008. The same is true in share of adjusted gross income paid in taxes; from 2001 to 2008, while the proportion of adjusted gross income paid in taxes by the highest one percent of filers fell 15 percent, that proportion fell 63 percent for the lowest half.
The historical record clearly demonstrates that, in the long term, across-the-board tax cuts increase the total contribution made by the wealthiest while relieving the burden most the lowest-income filers. Simultaneously, it is the fairest treatment especially to the small group that pays incredibly disproportionately highly to allow so many that pay little or nothing to receive their transferred wealth. If Landrieu regards this as “morally corrupt,” one wonders just what her morals are.
In the final analysis, these statements demonstrate that Landrieu prefers conducting class warfare over pursuing good policy.