I wrote this and posted it at my other blog (davew0958.wordpress.com), deciding to re-post it here:
I have heard more than one commentator say that the American people expect the various factions of Congress to “get along.” I’m not sure I buy that, especially when “getting along” means compromising on core beliefs that many consider too vital to budge on, even a little. It may just be that the American voter is more responsible for this pending ‘cliff’ than the members of Congress are.
The big issue here (for Democrats, at least) is the desire to raise taxes on those making more than $250,000 per year. Their argument is that the wealthiest Americans aren’t paying their “fair share” and the majority of our citizens think they should pay more. While I don’t doubt that most Americans think those making over 250K should pay more, I must point out that most Americans don’t make that amount –so it’s easy to finger point and act like it should be no big deal –when it’s not coming out of your wallet.
On the other hand, Republicans think that over-spending is the problem here, not revenue -and the rich already pay the lion’s share of our country’s revenue. They accuse the Democrats of not being willing to compromise on entitlement reforms.
So where is the truth? As always, I suspect it is somewhere in the middle. I do not, for one minute, believe that letting the tax cuts expire for the wealthiest Americans will somehow cause the rich to suddenly decide to stop expanding. Wealthy people don’t create jobs for some philanthropic reason, or specifically because they are paying less taxes, they do so because it serves their bottom line. Nothing saintly about it. Just capitalism, plain and simple. History proves this to be true. Higher taxes will not stifle expansion. In fact, wealthy citizens may actually invest more to increase their revenues to counter losses from additional taxes. What will happen if we fail to extend tax cuts for common, ordinary people who drive this economy through spending, thereby indirectly employing people to create goods and services to meet demand, is that they will pull back their limited resources from spending and investing to meet the added demand of Uncle Sam’s voracious appetite for spending of late.