Spotted on teh Twitters yesterday:
Obama in Columbus: “You give a tax break to millionaires, what’s he going to do with it? You can only buy so many yachts.”
— Alan Johnson (@ohioaj) September 17, 2012
It was supposed to be a laugh line, I assume. A real gotcha. Because Mitt Romney is rich and another tax break would mean he would have more disposable income, with which he would clearly do nothing productive but would just buy another yacht. The nerve.
It’s basic populist, class warfare rhetoric. It’s also a symptom of why this disaster of a president’s policies have caused an economic crisis to turn into a societal and economic malaise. It’s also sloppy.
For starters, I wonder how all those people who manufacture yachts and yacht accessories, or the raw materials used in yacht production, would feel about their livelihoods being slighted.
Yachts don’t descend from Mount Olympus, whole and entire, clad in platinum and birds eye maple, landing gently in some small New England harbor where they wait, sleek and pretentious, until T. Coddington van Voorhees VII comes by in one of his chauffeured Bentleys that runs on the tender tears of baby seals to snap up another one. To use for firewood.
Someone builds those yachts. In fact, a whole lot of someones build those yachts in New Jersey, Wisconsin, Florida, Tennessee, California, New York, Washington state, North Carolina, South Carolina, and other states. They get paid to build them. Chances are good that the majority of those who labor to build them cannot afford to buy them. So if more are purchased that means more people are doing more work to build them. If more are purchased, more people are hired and paid money to build them, which means more people have money to live their lives.
Second, any president who, in the midst of an economic crisis, would chuck around $6.5 billion of taxpayer money down money sinkholes like Solyndra, Ener1, and Abound, and push stinkers like the Chevy Volt with massive taxpayer-funded subsidies has no right to lecture anyone else on what is an appropriate thing to do with their own money.
Third, millionaires like Mitt Romney didn’t *become* millionaires by buying another yacht. Self-made millionaires make their money by working hard, taking risks with their own money, and investing their own money wisely in companies that prosper. In the process healthy companies grow and hire more people. Unhealthy companies close, thus freeing up resources—including laborers—to contribute to the economy in a company that will progress and grow.
So, if you give tax cuts to those who pay lots of money in taxes they then have more of the money they earned to use either to buy stuff, which spurs economic activity, to directly invest in companies, which spurs economic activity, or to donate to worthy philanthropic endeavors, which spurs some economic activity and good deeds.
But don’t just take my word for it, check out what Obama’s former chief economist said about tax cuts and tax increases.
(Side note: anyone else remember the time John Kerry—a millionaire who did not earn his millions but married into them—was caught docking his brand new yacht—a 76-foot, seven million dollar, foreign made behemoth, I might add—in Newport, Rhode Island, rather than Massachusetts to avoid paying Massachusetts taxes on his luxury liner? Fun times.)
So if the intention is to spur economic activity then even by the standard set in Obama’s own demagoguery, a tax cut for millionaires would not be a bad thing. Whether he millionaire buys another yacht or invests in a startup or even, perhaps, a company with a new energy saving technology (read: green energy)—but one that is *worth* investing in on the business merits—the tax cut for the millionaire seems like a good idea.