For laughs, when you get a chance, take a look at what’s in the “People’s Budget” put out by the Congressional Progressive Caucus. I did so this morning, prepping for an interview with Garret Lewis on 790 KNST related to our action at noon today at Raul Grijalva’s office in Tucson.
For starters, that budget has not been scored by the Congressional Budget Office, which means it can’t be taken seriously. They’re bringing a whiffle ball bat to a Major League game.
Also, the “People’s Budget” would raise the top personal income rate to 49 percent. But the rich don’t get rich by being stupid. They and their teams of accountants will find ways to move their income offshore, or into tax-exempt vehicles. The federal government’s tax take will very likely continue to hover around 18 percent of GDP–as it has consistently for the past 70 years, regardless of what the top marginal rates were.
To raise the kind of revenue Grijalva is contemplating, we will have to do what Europe does, which is to kill economic growth and create massive structural unemployment by taxing workers (VAT, payroll, etc) at higher levels. So much for being a champion of the Working Man.
As economist Arnold Kling explains in a paper for the Mercatus Center, the productivity of the average French worker, in GDP per hour, is $48.99, very close to the $49.67 produced by the average American worker. The huge difference in per-capita GDPs ($30,667 for France, compared to $43,250 for the US) is explained by the fact that Americans work 871 hours per year per capita, while the French only work 626 hours per year per capita. If we raise taxes on working Americans, they will work less, and produce less.
The short summary is that Grijalva and the radical progs in Congress have NO PLAN to get this country out of its long-run fiscal disaster.
For Liberty, Tom
Americans for Prosperity