Tipping point

Usually I find him to be a right-wing blowhard, and often when I do agree with his position I find his logic supporting that position to be questionable. But today Jim Wooten's column had an interesting slant on the tipping point represented by this election.

Consider

"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy..." Attributed to various people.

While the source of the quote is questionable, there it is nonetheless.

That tipping point: 220 million eligible voters. 89 million pay no income taxes, and another 65 million pay only 3% of income taxes collected. Obama wants to add millions more to the no-taxes column. More than half of the voters are not paying into the pot of money from which they will control the outflow.

More from that article:

Bob Irvin of Atlanta, a management consultant and former Republican minority leader of the Georgia House, observes that Obama “is trying to convince voters that his new taxes will only hit” those at the top.

“But do the rough math for yourself,” he continues. “Suppose he took a hundred million dollars a year from every Fortune 500 CEO. That’s $50 billion. If you add $100,000 from each of the top 1 percent, that’s 3 million people times $100,000 and that totals $300 billion.”

Continues Irvin: “You’re still less than halfway to the annual amount he proposes to increase spending, which is $800 billion a year. To get there, he’ll have to raise taxes on everybody else an average of $1,500 a year,” including illegal immigrants and those who pay no taxes now.

Note that that $1500 is from every man, woman, and child. And the math here is correct, the $800B figure is commonly quoted for Obama's plans and ($800B - 500 * $100M - $100K * 3,000,000) = $450B. And if the population is 300 million people, $450B / 3ooM = $1500.

Another take on that is this. The expected tax increase for the top 0.1% (income more than $2.87M) under Obama's plan is $701,885, and the expected tax increase on next 1% (income between $603,403 and $2.87M) is $115,974. Now, it seems to me that if I had that kind of income, I could afford to pay accountants and layers to help me structure my finances to minimize my tax load. It certainly seems like a decent trade for me to pay $500k to avoid having to pay an additional $700k in taxes. Or maybe I could spend $100k to reduce my tax load by $500k or for the next group, it seems that if I can spend $50k to avoid paying %100k in additional taxes, then I'd probably do it.

So I have to wonder what Obama is going to do when all those people decide to *not* pay those taxes. Or what the charities these people have been contributing to find themselves short hundreds of thousands of dollars in contributions?