“The only way to finance a big European-style state is to have it paid for by massive taxation of everyone, mostly the middle class. Right now, we are avoiding honest debate on this fact…The first truth is that the current tax rates cannot support the promises made to middle-class Americans. The most unaffordable items in fiscal projections are Social Security for everyone and government-sponsored health care for the middle class. You cannot preserve these even with Draconian slashing of military, infrastructure, welfare, education, and other expenditures. The second truth is that you cannot pay for the Life of Julia, or any vision of a cradle-to-grave welfare state, without massive and increasingly regressive middle-class taxes. The poor don’t have the money to pay for a European-style welfare state, and the rich, rich as they are, don’t have anywhere near enough. Not only that, it’s easy to tax middle-class assets and transactions — things like payrolls, sales, and real estate — but soaking the rich means taxing investments. Investments are complicated and can be restructured to minimize taxes. Also, investments are the lifeblood of economic growth. Raising significantly more taxes from the rich also requires higher marginal tax rates — and their rates are already quite high. High marginal rates distort the economy and yield less revenue than anticipated because they increase the rewards for legal and illegal tax avoidance…to achieve anything like the European-style entitlement state they advocate, we need to tax everyone a lot more, not just the 1 percent. Despite all the drum circles protesting the inequitable distribution of resources, the wealthy just don’t have enough. The middle class and even the poor must step up to carry more of the burden if this is our desired endgame.” [The American via Heidi Moore, related]

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Comments (20)

  1. Posted by Guesticles | January 7, 2013 at 1:34 PM

    You serious, brah? This all assumes I care to keep social security, medicaid/care, and every other useless entitlement program. I believe there's a fundamental flaw in that logic.

    -The Middle Class

  2. Posted by guest | January 7, 2013 at 1:36 PM

    Did you eat a lot of paint chips as a kid?

  3. Posted by Guest | January 7, 2013 at 1:47 PM

    For some reason His Cliffness stopped short of saying that only Captain America could save us.

    –Guy who doesn't understand why he holds back…sometimes

  4. Posted by Guest | January 7, 2013 at 1:53 PM

    …so you're a fan of useless, obvious commentary, too?

  5. Posted by Guest | January 7, 2013 at 1:58 PM

    Sniff Swassness is the consummate American.

  6. Posted by Above The Law | January 7, 2013 at 1:59 PM

    So what you are saying is that if I go bald, but grow a beard I will retain the same amount of heat on my head.

  7. Posted by Guest | January 7, 2013 at 2:18 PM

    What Cliff forgot in his little rant is that we have a printing press here at the Federal Reserve, and any time we want, we can just print up the money to pay for everything. Yep, just as soon as we decide we don't want to borrow any more money, we can just fire up our printing press and pay for it all with new money. I don't see what could possibly go wrong.

    – Ben B.

    P.S. Did I mention that I have a printing press?

  8. Posted by Greek Financier | January 7, 2013 at 2:35 PM

    Wow, way to be a dick about it.

  9. Posted by Bacon Is Tasty | January 7, 2013 at 2:43 PM

    I'm gonna have the american cheese omelette, with french fries……mozzarella cheese melted upon those fries…..and a snazzy cup of gray-vee on da side. And coffee…….real milk, none of that non-dairy farmer mumbo-jumbo.

    — Diner patron

  10. Posted by McLovin' | January 7, 2013 at 3:41 PM

    I've got a boner!!!!

  11. Posted by PermaGuestII | January 7, 2013 at 4:59 PM

    Rant? This doesn't move the needle off zero on the Biff Basness rant-o-meter.

  12. Posted by guest | January 7, 2013 at 5:30 PM

    It's true! This was way tame, making one wonder if it is bona-fide Cliffperbole with those Tourette-like barrages of expletives. Cliff is truly the master of his domain.

  13. Posted by Gozer | January 7, 2013 at 5:50 PM

    Seigniorage is also a tax.

  14. Posted by Beef | January 8, 2013 at 8:33 AM

    Can you make the font even smaller? Right now it's set for reading by ants. Please set it for bacteria.

  15. Posted by Taxed Brit | January 8, 2013 at 8:53 AM

    Man has a point you should see the taxes we have on alcohol and gasoline….

  16. Posted by Puzzled | January 8, 2013 at 3:29 PM

    I wonder why you snark this. It's so obviously the case.

  17. Posted by Guest | January 8, 2013 at 10:20 PM

    Pure gold.

  18. Posted by True Story | January 9, 2013 at 10:39 AM

    this guy won Best Dressed Bear at the Castro Street fair in SF..

  19. Posted by Stark | January 10, 2013 at 9:38 AM

    Obadiah Stane should worry about his own waistline

  20. Posted by sohbet | May 12, 2013 at 6:47 PM

    telling these little stories, here's a good idea: Have a point. It makes it so much more interesting for the listener.