By Bob Ward
When Joe the Plumber pointed out to presidential candidate Barack Obama that his tax proposal could kill the s mall business he hoped to start, Obama replied that he just wanted to “spread the wealth around.”
Obama is spreading something, but it is not wealth. His answer reveals a concentrated dose of economic ignorance. The reality is that without a damaging take hike on businesses, without a government program with its attendant bureaucracy and stifling regulations, wealth, left alone, spreads itself around.
No sane person, and certainly not Joe the Plumber, takes his money and buries it in the backyard. He spreads it around by spending it. And his expenditures create jobs for the people who manufacture the goods and provide the services that he purchases.
Obama’s tax proposals would interrupt that spontaneous, market driven spreading of the wealth by seizing money from the producers -- the businesses that provide the goods and services people purchase. In promoting this scheme he is invoking the myth that taxes imposed on businesses are somehow not paid by the people. He is being deceptive.
Corporations do not print money to pay their taxes. They get that money from the people in the form of higher prices for their products, lower wages or layoffs for their employees, curtailed purchases from their suppliers, or smaller dividends for their shareholders. And shareholders, it should be noted, includes the pension plans that working people rely on to provide a decent income for their retirement.
The bottom line is that the government cannot tax an abstraction and that’s what a corporation is, a legal fiction. The actual payer of taxes is real people. There is no one else.
Obama talks a lot about “fairness” but his proposal to tax business instead of people is not fairness – it is demagoguery.
Tuesday, October 21, 2008