Tax and punish

One of the most confounding things about the Democrats in Congress is the fact that they don't care about economics. The only thing that matters is ideology -- one based on redistributing income in the name of their version of "social justice". To the left, social justice means punishing the productive members of society by taking "from the rich" and giving to the "poor". The goals always justify the means -- even when the means makes no economic sense and will in the end make things worse for all Americans.

This is the only conclusion you can draw by the revelation that Congressional Democrats (including Charlie Rangel -- who doesn't pay his own taxes, but that's another story) are planning massive surcharges on the "wealthy" to pay for socialized medicine. This is, of course, a peculiar strategy if you really want to repair the faltering economy and solve rising unemployment -- now nearing 10% nationally (and much higher in many high-tax states). As the WSJ reports, the Rangel method hits (you guessed it) job creators particularly hard:

Every detail isn't known, but late last week Ways and Means Chairman Charlie Rangel disclosed that his draft bill would impose a "surtax" on individuals with adjusted gross income of more than $280,000 a year. This would hit job creators especially hard because more than six of every 10 who earn that much are small business owners, operators or investors, according to a 2007 Treasury study. That study also found that almost half of the income taxed at this highest rate is small business income from the more than 500,000 sole proprietorships and subchapter S corporations whose owners pay the individual rate.

But, of course, fixing the economy isn't really the issue -- since the left doesn't really believe there is a correlation between economic growth and taxes. Just ask the state governments in high tax areas like California and New York. In fact, the tax hikes in the Democratic economic plans will make effective rates in a state like California near 60% -- meaning for every dollar you earn, 60 cents will go back into the coffers to finance programs for the "less fortunate". As anyone who uses logic to look at these issues, it doesn't take much to draw the conclusion that such a tax scheme is a disincentive to build wealth. And for those on the left who think that money grows on trees, building wealth means starting businesses that put people to work. Yes, that's right -- punitive taxes kill the golden goose.

Ahh, but that harldy matters when you have social engineering in mind. No amount of evidence that proves that higher taxes leads to less tax revenue will derail the socialists in government from punishing the robber barons who create value in the economy. Obama's own White House economist, Christina Romer, is actually an expert on the relationship between higher tax rates and falling tax revenue:

Democrats claim these tax increases on the rich won't do any economic harm. They should read the work of Christina Romer before she became chief White House economist. Ms. Romer and her husband, David Romer, a Berkeley economist, have published multiple studies on the impact of tax policy changes over the past 100 years. One of their findings is that "tax increases appear to have a very large, sustained and highly significant negative impact on output." In other words, tax hikes are an antistimulus.

Democrats like to say that government can solve most of America's problems. But where do they think the money to fund government comes from? The truth is that they don't care -- having never run a business or done anything other than feed at the public trough, most legislators on the left believe that tax revenue is an inexhaustible resource, impervious to incentives and disincentives. Pity that they don't know history -- which has time and again proven otherwise.

It is true that Republicans over the past decade have been little better than their Democrat colleagues in pillaging the public trust. But that is no reason to proceed down this path to confiscatory taxation and economic ruin. It was announced today that our deficit just passed $1 trillion. Where will it end?