More Republicans willing to accept tax increases to avoid cliff

In a sign that Republicans feel the pressure from the White House and Congress to pass “something” that resembles fiscal reform, more Republicans in D.C. are showing signs that they are willing to accept tax increases on the wealthy to avoid the so-called fiscal cliff that looms in the near future.

This includes Tea Partiers who at one point slammed Congress for not doing enough to curb spending and provide tax relief for the majority of taxpayers.  At the heart of the matter is whether or not the Bush-era tax cuts will get extended to all Americans, or just those who make under $250,000 a year.

“I am not going to take anything off the table if we can resolve some of our biggest issues as a country,” said Michigan representative Justin Amash – an attorney by trade – who enjoyed big-time Tea Party support.  Or Sean Duffy from Wisconsin, who said that he believes in a “balanced” approach to the fiscal problem and generally accepting of the language put in place by Democratic leadership to raise revenue via taxation.

Even Florida Congressman Allen West, who recently lost his re-election bid (but still holds his seat until January) said he generally supports tax increases on wealthier Americans.  He believes the threshold for “wealthy” needs to be set at $2m, rather than the $250k set forth by the president.

Many of these Republicans seem unaware that public revenues often decrease as taxes on the wealthy are increased.  Facts and basic economic principles be damned, though, as our elected representatives decide on which Americans to screw over in order to fund the next wave of government spending.

Many support the closure of loopholes in the system, and that’s good.  But far too much attention is being paid on the easier solution of raising taxes on those who already pay the majority of taxes – which, as we’ve stated many times before throughout, encourages the exploitation of loopholes, offshore bank accounts and in some cases a straight exodus of revenue-generating businesses from our nation.

Republican Steve King said of the matter, “Conservatives might be able to figure how they can go home and rationalize a vote that included a revenue increase and or a tax rate increase.”  There always seems to be a way, and that is the problem.

Wealthy Britons flee country as tax rates skyrocket to 50%

In 2011, Britain saw a dramatic decrease in the number of affluent citizens in the country after then-Prime Minister Gordon Brown instituted an astounding 50% tax rate on Britons earning more than $1m.  In fact, less than half of those who reported incomes exceeding one million reported the same after tax rates increased.

Naturally, wealthy Britons took steps to either reduce their taxable incomes through the exploitation of loopholes or simply fled the country altogether.  It is estimated that the loss in revenue due to fleeing Britons amounts to more than 7 billion pounds.  In Britain, if tax rates are raised too high, revenues decrease.  But, this is not a phenomenon unique to our friends across the pond.  Anyone hear about France’s richest man applying for citizenship in Belgium after a promised skyrocketing of French taxes?  Or why it benefits French companies to cap the number of employees to 49 as to avoid expensive regulation?

To curb the exodus, British Chancellor George Osborne announced a decrease in the top tax bracket from 50% down to 45%.  While still amazingly high, the number of $1m/year earners shot up almost immediately in the country, although still short of the original number previous to 2011.

Are we paying attention, U.S. government?  The United States needs to learn from history that nations cannot punish the wealthy for the supposed benefit of the rest.  Further, punishing tax rates naturally deter entrepreneurs from doing business in the country.  Fleeing British business owners attest to the fact.  How about the number of overseas bank accounts?  Outsourcing jobs to cheaper nations?  Taxes have consequences, and unfortunately the American people are forced to shoulder the burden of governmental ignorance of basic economic concepts.

Rhetoric from career politicians in Washington indicates a steadfast commitment to killing entrepreneurship and success in the United States as federal bureaucrats continue to blow through piles of taxpayer dollars on hollow initiatives, clumsy stimulus packages and never-ending wars throughout the world.

Barack Obama has repeatedly promised to raise taxes on “the rich”, to punish those for having more than the rest of us.  Deficits are running high, and so is economic uncertainty.  Spending less and downsizing government is never the solution in a government where politicians are unaccountable and the American people seem unwilling to make a drastic change in their leadership at the voting booths.  And so, government spending will increase, taxes will rise and business owners and would-be entrepreneurs will continue seeking safe havens overseas from punitive tax rates.

The more successful nations in the future will be those who create a welcoming culture where success is praised, not punished, and where the free market dictates policy, not career bureaucrats.

Mark my words.

Obama demands tax hikes on rich before any compromises

Days after the re-election of Barack Obama, the president said that any compromise from his office on the issue of taxes and the national debt will hinge on the inclusion of tax increases for wealthier Americans in an fruitless effort to slow our nation’s rising debt and limit the ensuing economic calamity.

“I’m committed to solving our fiscal challenges, but I refuse to accept any approach that isn’t balanced,” the president said.  Apparently to Mr. Obama, “balanced” means nothing more than offsetting any spending cuts with further tax revenue from this country’s job providers.

Obama insists on raising taxes on those who make more than $250,000 a year, although hard numbers on how much of a rise remains unknown.  According to Obama, a majority of Americans also believe this nation’s punitive tax system should be strengthened for those who are considered “wealthy”.

“I just want to point out, this was a central question during the election. It was debated over and over again. And on Tuesday night, we found out that the majority of Americans agree with my approach,” he said.

This news comes at a time when deficits remain at all time highs.  October, the first fiscal year in 2013, has already seen a massive increase in budget deficits — $6 billion above the estimated $114 billion.