So that’s the type of debate performance it takes to make the mainstream media finally abandon their propaganda for Obama–for a few minutes. The excuses from the President’s supporters are, it was the altitude, the moderator was bad, Obama is ahead so he didn’t care, and Romney alienated voters who love Big Bird. Is Romney perfect? No, but it was nice to see him bring up some good points about Obama’s failures. This was particularly effective when Romney used Obama’s own words from 2010 to argue that “taxes should not be raised on anyone when there is a recession”, yet now when the economy is worse than in 2010, Obama abandoned this statement and seeks to raise taxes, in order to raise revenue. [Read: “Obamacare Raises Taxes on the Middle Class].
Have you noticed the term “tax increase” has changed to the phrase “new revenue”? This is to soften the tone and make it sounds less harsh, but it is totally misleading. As I have pointed out on numerous occasions, tax increases do NOT necessarily mean revenue increases. This is because people change their behavior; they move (like what is happening to California), they change their investment practices, they retire early, or they pull their money out of our economy, and put it in a tax haven. It is a myth that raising taxes is an easy way to boost revenue; raising taxes slows the growth of the economy, and therefore allows fewer people to pay taxes, while the people who do pay taxes earn less, and therefore pay less. Obama could not help but fall back to “the rich need to pay their fair share”, while Romney pointed out that “punishing the rich” is bad for the economy.
It was encouraging to see both candidates talk about taking the corporate tax rate down to 25%, however this was most likely just a talking point. Either way, the corporate tax rate should be 0% because corporations cannot and will not pay taxes. Corporations pass the cost of taxes on to their customers, in the same way that the costs of materials, and hiring personnel are passed on to the consumer. The amount of money taken in over expenditures is profit, and the company will not absorb the taxes by taking it out of the profits. Since corporations have a responsibility to the shareholder to turn the biggest profit possible, when this profit shrinks enough they will look for other ways to cut costs, such as outsourcing jobs. To summarize, cutting the corporate tax rate to 0% would keep more jobs in America, lower the prices of goods and services provided by corporations, and attract more business to America because the costs of operating would be lower. [Read: What Info Does the DOJ Receive, Why Jobs Leave, and What Doctors Believe].
The topic of cutting corporate welfare in order to help balance the budget was also brought up. Both candidates suggested they would be in favor cutting corporate welfare, which amounts to at least $100 billion annually–almost 10% of the yearly budget deficit. Romney stated that these company’s would not need corporate welfare if the corporate tax rate was significantly reduced. In reality the crony capitalist ties to the government are probably too strong to stop the federal redistribution of our tax dollars to giant corporations. We as vigilant citizens must therefore demand it.
There was also much talk in the Presidential debate about whether to take a top down approach to the economy (government planning, government stimulus, Keynesian approach) or allow the growth of the economy from the bottom up (create economic conditions and government policy conducive to business and jobs, free up the market, Austrian economic perspective). It is painfully obvious that allowing the conditions for business to thrive is far better for the economy than government intrusion into the private sector. What the two perspectives amount to is either A) reduce individual rights and reduce property rights so that the government can serve as arbiter between “the needs of the people” and the economic production or B) an economy absent of force, where individuals are free to pursue their own version of happiness, and keep the products of their own labor–whether physical or mental labor.
This last subject is worth reading into. In a recent article entitled “An Economy Absent of Force” I lay out the major differences between the current Keynesian approach to economics, versus the free-market Austrian approach. If we allow the most productive in our society to keep the products of their mind and labor, they will all take us along for the ride. If we confiscate the products of producers’ labor, we will have killed the goose that lays the golden eggs.