Don't Fall For the Class Warfare Lie

It's the night before the election so here is some food for thought regarding election ads: Be wary of anyone who demonizes the wealthy and pits the poor or middle class against them. Also, be wary of anyone who pits people against corporations, which are owned by...you guessed it, people. In fact, if you own any stocks, even in a 401(k) or retirement account, you are one of the owners of probably a number of corporations.

Anyone who argues for raising taxes on the wealthy or on corporations to benefit the middle class or poor, is either ignorant of economics or is dishonest. The current economic crisis is a problem of a decrease of wealth in the United States, not the shifting of wealth. Wealth is actually created in the United States (and can therefore be destroyed) not merely shifted from one group to another. Trying to increase taxes on the wealthy actually creates disincentives for wealth creation as those who have accumulated wealth seek to protect it from being taken away by the government, rather than risking it in investment (which leads to jobs, which leads to more wealth created, etc.). Trying to increase taxes on corporations simply results in higher prices for consumers and/or decreased business costs, including investment and labor costs (meaning layoffs). As Ronald Reagan once said:

The most dangerous myth is the demagoguery that business can be made to pay a larger share, thus relieving the individual. Politicians preaching this are either deliberately dishonest, or economically illiterate, and either one should scare us. Business doesn’t pay taxes, and who better than business to make this message known? Only people pay taxes, and people pay as consumers every tax that is assessed against a business. Begin with the food and fiber raised in the farm, to the ore drilled in a mine, to the oil and gas from out of the ground, whatever it may be—through the processing, through the manufacturing, on out to the retailer’s license. If the tax cannot be included in the price of the product, no one along that line can stay in business.

So, here is the bottom line: Don't fall for the class warfare lie. It's steeped in jealousy but not in truth.