Mr. Hall once again invokes George Orwell’s “1984” in his column of Aug. 3. He divides America into two classes, the deserving rich and the undeserving “unrich”. In Orwell’s book language was under attack by eliminating “unnecessary” words. For example, why do we need a word like “bad” when we could easily just use “ungood”. Does he have an obsession with “1984”, or is he just practicing doublethink.
I guess he is talking about the 98% of Americans who make up the “middle class” as the “unrich” and the other 2% as the rich. He asks, what do the rich do with their money? He claims that most of their wealth is tied up in their businesses. This is just plain wrong. The overwhelming majority of people who run their own businesses would not meet this definition of being rich, and no one has proposed raising taxes on the other 98% of us. The 2% do not run their own businesses, they pay someone to do it for them by way of stock ownership. Hs asks, rhetorically, if we take away the money from them and gave it to the “unrich”, what would happen? To put it as simply as possible, the money would be spent on goods and services, using up the inventories businesses have built up and creating the conditions that would enable them to hire more people to make more products and provide more services, creating more demand for more goods and services, etc. etc.. 98% of the American people can create more demand than can the other 2% by orders of magnitude.
In his his analysis of the currency markets, and once again he is off-base. The US dollar has fallen and continues to fall against every major world currency. This is not because the rest of the world has accepted the American attitude that government is evil and incompetent should keep its hands off the economy, it is because our economy is on the skids. Canada weathered the credit crisis and the sub-prime debacle better than us precisely because they did not engage in the wholesale deregulation and the delusional thinking that the interests of the banks and Wall Street are the same as the economy as a whole.
He asks us to consider if America could possibly continue to be the world leader in innovation and invention if we ask the richest 2% to pay taxes at a nominal 39% rate. History has already answered that question. When the income tax was instituted in 1916 it was set up to apply only to the richest 2% of the people. Up to the 1980’s we had nominal tax rates reaching above a 90% rate, and yet, the 20th century was our greatest century to date. Of course, for most of the century we actually built things and sent them around the world. Today, one of our largest exports is jobs. The next time someone tells you only a rich person creates jobs, ask them in what country. Another dirty little secret of the rich is that no one actually pays the nominal rate. The top tax rate only applies to the last dollars the rich receive and it doesn’t apply to major components of their income. (dividends and capital gains are taxed at a 25% maximum rate)
The basic law of the economy is supply and demand. It does no good to stimulate the supply side if there is no demand. If there is a demand for goods and services, the supply will be created.
Cape May – Governor Murphy says he doesn't know anything about the drones and doesn't know what they are doing but he does know that they are not dangerous. Does anyone feel better now?
