It is interesting to me to hear leftists in Washington DC continue to call for higher taxes on “the rich” while at the same time promising to create jobs.

Here’s a fact: During the Coolidge, Kennedy, Reagan and Bush 43 eras, tax cuts translated into more government revenue. And that revenue came largely from “the rich.”

Here’s why: When tax rates were lowered, “the rich” invested their money where they got greater returns. Greater returns – even at lower tax rates – meant more revenue for the government.

In the Washington DC debates over the debt ceiling, President Obama has called on Congress to come up with a “big and meaningful” plan for solving the debt crisis, but he rejects any plan that does not include “new revenue.” By new revenue, the President means “new taxes.”

Over and over again, it has been demonstrated that tax cuts grow government revenue.

Here’s another fact: Increasing taxes will decrease government revenue. According to a 1996 report from Congress’ Joint Economic Committee, when President Clinton increased taxes on “the rich” in 1993, revenues actually dropped because the tax increases made wealthy people seek to shelter their income from higher taxes. The 1993 tax increases failed to collect some 40 percent of the projected revenue.

Ask any congressman and, if he’s truthful, he will tell you that the tax code is less about raising revenue and more about controlling behavior. Tax laws are always generated with a view to their affect on behavior. When congressmen want US citizens to save, they impose tax incentives for investments in retirement or education funds. When congressmen want US citizens to give to charity, they offer tax breaks for charitable donations. When they want US citizens to live Green they offer tax breaks for hybrid cars or energy efficient air conditioners.

So it is no surprise that tax policy has an effect on what people do with their money.

Reducing tax rates provides incentive for investment. Investment, alternatively, increases wealth. Increased wealth increases government revenues – even at lower tax rates. Increasing tax rates provides incentive for people to find tax shelters. Tax shelters mean less government revenue – even at higher tax rates.

Worse, tax shelters mean less investment in the private sector, and less investment in the private sector means fewer jobs.

For the last several weeks, President Obama has been talking about “new revenues” as part of a debt ceiling deal. But he’s also been talking about jobs.

With unemployment continuing to “unexpectedly” be above 9 percent, the president has also been tying new jobs to the debt ceiling. Obama has said there is an urgent need to reach a deal on the debt ceiling because then businesses will have “the certainty that they need in order to make additional investments to grow and hire.”

Economists can explain it and the good ones can even project it, but we don’t need them because history has shown that increasing tax rates stifles economic growth while lowering tax rates spurs economic growth.

Here’s another fact: Increasing tax rates has only ever meant increasing spending for our federal government.

Recently the Democrats released an advertisement quoting Ronald Reagan who in 1982 called on Congress to increase the debt ceiling. Reagan struck a deal with the Democrats that called for a slight tax increase. The deal was that for every $1 increase in taxes there would be a $3 decrease in spending.

The Democrats reneged on the deal, spending increased and Reagan regretted the bargain he’d struck. Today’s Democrats left that bit out of their ad.

At the end of the day, the problem our nation currently faces is the problem that has been steadily growing on us for the past several decades: Government is too big. It seeks to do too much; it promises too much; it spends too much; it borrows too much; it takes too much; it gives too much.

Too much.

It is not hyperbole to say that the politicians are gambling with the future of the United States of America. If our nation is going to maintain its place of economic dominance in the world, the absolute only way that will happen is through a return to liberty.

Individual liberty through economic freedom – freedom from the government – is what promoted the United States to its position in the world, and nothing else. Individual liberty through economic freedom is what has allowed generations of Americans to move from poverty to wealth. Individual liberty through economic freedom is the reason that generations of Americans have had the reasonable expectation that their children would do better than they had done.

Ask yourself: Do you believe your children have as much opportunity as you had? Do you believe your children will do better than you did?

The answer is simple: Reduce the size and scope of the federal government. Shrink government, and watch the people grow.

Rob Peecher is editor of The Oconee Leader. He can be reached at 706-310-1104 or by email at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .

---