From the new fiscal cliff deal, the status quo will remain with the producers of this country providing for the takers. A tax increase of $620 billion was met with a measly spending cut of $15 billion, showing that the Democrats largely won this showdown.
The major difference in this bill from what Obama originally campaigned for is that those making more than $400,000 a year will see a 5% tax increase on income that exceeds this threshold, instead of the $200,000 original figure (The 3.8% Obamacare surtax on investment income starts this year as well). However, deductions and exemptions will start getting phased out at the $200,000 per year income level, so taxes were in fact increased on this income group as well. And of course, not surprisingly, this bill was also loaded with pork. What do they care, it's not their money, right?
The main fight in this battle came down to tax rates. Democrats have always been intent on keeping the tax code as progressive as possible (even as the OECD previously published a report that the US has the most progressive tax system of developed countries), and Republicans want to flatten them out and level the playing field. There are more voters who would prefer someone else to pay their taxes for them, so the system we end up with is a progressive system in this country. The biggest problem that I have with Democrats is that they seem to believe that they are entitled to the fruits of your labor. You've earned too much money? We'll you must be greedy and need to be taxed to spread the wealth around.
This is a stark contrast to the principles our country was founded on, where if you had motivation, ambition, or a good idea, you got to enjoy the fruits of your labor. Now it has become a game of having to take care of everyone else even though they did not contribute to your hard work, take your risks, or contribute to your investments. Those who signed the Declaration of Independence decreed for "Life, Liberty and the pursuit of Happiness." There wasn't an asterisk attached to that clause that stated, "If you've been too successful relative to the general population as a whole, you will be required to prop up those at the bottom so that they can be happier." Somehow the pursuit has been dropped and progressives think that the government is supposed to provide happiness. Or at least make that rich guy over there less happy, right?
I don't have a problem with taxation as the government needs money to function. But what I do have a problem with the fact that almost all of it is pushed onto a subset of the population and the rest get a free ride. When 47% of Americans don't contribute to the federal coffers, there is a real problem there.
Democrats supposedly want to 'fight' for the bottom (read: get votes, since there are a lot of them for the taking) and pull these 'poor' people from the bottom to the middle class, but there's just one problem: there will always be a bottom. It's just simple math. In any economic system, there will always be a bottom because there will be haves and have-nots. Yes, even in Communism and Socialism there will be a bottom (China: political class vs peasant class, Cuba: those happened to be living in large houses when Castro nationalized all property ended up with bigger houses, for two examples). It's just that in those economic systems, most people are poor. There will be those who excel and those who just do enough to survive. At some point one just has to ask, is being placed into the poor category (because that is all it is, an arbitrary number decreed to be poor) in this country really that bad? Compare America's poor to the real destitution in India or China. I am not saying that we should cut everyone off, but it definitely needs to be thinned down because as it stands now, our welfare system (everything included, not just TANF) is too liberal and skews the incentives of able bodied people to not work.
I am reminded of William J. H. Boetcker's Ten Carrots:
* You cannot bring about prosperity by discouraging thrift.
* You cannot strengthen the weak by weakening the strong.
* You cannot help little men by tearing down big men.
* You cannot lift the wage earner by pulling down the wage payer.
* You cannot help the poor by destroying the rich.
* You cannot establish sound security on borrowed money.
* You cannot further the brotherhood of man by inciting class hatred.
* You cannot keep out of trouble by spending more than you earn.
* You cannot build character and courage by destroying men's initiative and independence.
* And you cannot help men permanently by doing for them what they can and should do for themselves.
A hundred and fifty years ago, if you didn't go bust your ass in the field, you didn't eat that day. Now, if you don't want to work, you get public housing, section 8 reimbursements, food stamps, welfare and other entitlements. These of course are all paid for by those who have the tenacity to go to work each and every day and pay taxes. This tenacity is attacked when the incentives for not working are increased and the punishment for working are also increased (higher taxes). Therein lies the fundamental flaw for today's politicians of an understanding of basic economics. If you subsidize something, you get more of it and if you tax it you get less of it. Snopes showcases a humorous analogy of How Taxes Work.
The Democratic philosophy has evolved to the position that if we can't raise everybody off the bottom, prevent people from reaching the top. They are so completely bothered that our country has produced so many millionaires. If someone is legally earning a much larger income than a majority of Americans, it usually means that whatever that individual is doing is valuable to society. People buy whatever it is they are selling. And these transactions are mutually beneficial or else both parties would not engage in the transaction. What about if this person inherited a fortune? Well, his father, or his grandfather produced something so valuable that he was able to amass a fortune so large that he could gift his children a nice life. His children won the womb lottery. Lucky them. But why should anyone else be entitled to the father's gift? If it were his intention to give it to the government, he would have done so in his will. And inherited wealth is not the norm in any case.
It seems that most people in this country think that salaries are distributed like a lottery, and perhaps they just haven't been lucky enough to receive a high salary. Sure, there may be some luck involved, as in life there usually is, but generally people who make large incomes aren't just lucky. They don't just roll out of bed and instantly become a surgeon. Most of these people have put in an effort, risk or created something innovative and their income is their reward. Being able to keep more of one's reward, is one of the reasons why America has been the most innovative country for the last hundred years.
The simple fact of the matter is that those who want to tax others for personal benefits are selfish and want something for nothing; They want something with someone else paying for it. It's legalized stealing. How do Democrats justify that?