President Barack Obama is dead wrong when he claims we need to raise taxes on the wealthy to avoid the fiscal cliff and here's why.
The wealthy already pay most of the federal income taxes while the bottom 47 percent of income earners pay no federal income taxes at all.
There is no guarantee that an increased tax rate will bring in more revenue as the Democrats claim. In fact, a higher rate could bring in less revenue. When Presidents Reagan and George W. Bush lowered tax rates, government income skyrocketed. Yes, the national debt also increased during those periods because of runaway government spending exceeding the income. So the real answer to our current fiscal challenge is to put the brakes on spending and lower tax rates.
The question is who will better use the money, government or the private sector? A wealthy person will invest the extra money from a tax cut in business which creates expansion and more jobs and prosperity for everyone. When government gets extra money, it wastes it through inefficiency, corruption and favoritism benefiting only the politically connected.
Lower taxes reward innovators, risk-takers, the honest and those who provide exceptional products and services. Higher taxes reward those who are more skilled at obtaining favors from government officials.
President Obama's high-sounding rhetoric about raising taxes may seem like the right thing to do, but in reality it will create negative incentives for businesses that will erode the standard of living for the poor and middle class.