This is funny.
In response to the controversy over Mitt Romney’s words at a fundraiser, the liberals in the media seem to be forgetting their own meme about conservatives only wanting to grant tax cuts to the wealthy. When discussing the 47% who don’t pay federal income taxes, liberals resurrect the fact that it was Ronald Reagan who signed the Earned Income Tax Credit (EITC) into law in 1986 for struggling taxpayers who earned less money.
After Romney defended the carried interest exemption that allows him to pay a lower tax rate than many middle-class families, the Gipper’s apparition emerged from 1985 to insist that “the millionaire ought to pay more in taxes than the bus driver.” And now that Mitt Romney has slandered the 47 percent of Americans who pay no federal income taxes thanks to measures like the Earned Income Tax Credit (EITC), the ghost of Reagan is haunting him once again.
The facts: Yes, Romney gets a lower rate on investment income (than middle class or wealthy Americans who pay tax on ordinary income). The spin is where they fail to explain that it’s because he’s already been taxed at the higher income rate when he originally earned it through working. He then turns around and invests his previously taxed income at the ordinary rates and takes a risk by investing it. If it makes money, he gets a break on the dividends received. If he loses it, it’s gone forever. There isn’t a government bailout waiting to reimburse him.
The facts: Yes, Reagan signed the EITC into law. The spin: he didn’t compare the “millionaire” to the “bus driver” in the same context the left does. Reagan advocated for lower tax burdens on all Americans. Assuming there was only one tax rate that both the millionaire and the bus driver were taxed at, simple math would tell that the millionaire would pay out more in income tax. Reagan wasn’t talking in the context of rates. Nor did he talk about the taxation of ordinary income versus capital gains tax rates. He was talking about loopholes in the tax code that both sides of the aisle have benefited from.
All along, Obama and the Democrats have falsely led the nation to believe that it is conservatives who have no interest in providing tax incentives for the middle class and the poor. As they admit in these lame attempts of using Reagan against conservatives today, their usual rhetoric about conservatives protecting only the wealthy is proven utterly false.
Reagan believed it was far more beneficial to give a distinct tax cut (incentive) to lower income workers. It saved the government more money than it would if they all had stayed at home collecting welfare (which is growing under President Obama due to lack of opportunity). Plus it gave the workers a sense of fulfillment; to go out into the world and communicate with others, share experiences, learn about other opportunities and give them a feeling of what it is to be proud of a hard day’s work. This is what we call giving someone a fishing pole instead of a fish.
But Reagan also believed in lowering tax rates on those who provided the capital to make these opportunities possible. That’s why 20 million new jobs were created during his administration and why he increased revenues to the treasury.
He proved that providing tax incentives across the board puts people back to work and gets them off of a plan like President Obama’s which promises a lifetime of government dependence and shared misery. He was able to rely on the American spirit, our inherent freedom, and free markets to get it done. He didn’t have to engage in class warfare either.
Allow me to be the first to thank the Daily Kos and MSNBC for reminding us of this!