Secretary of State Hillary Clinton has been fairly invisible over the past year and a half. President Obama keeps sending her to obscure Third World countries.
Recently though she has been back home and used the opportunity to comment on “one of the biggest international problems we have… The rich are not paying their fare share in any nation.”
So now our Secretary of State wants to export America’s turn to socialism around the world. Last year she lectured Pakistan that they needed to raise taxes. What a complete reversal of America’s historical position that the United States is a country where you can take risks and, if you are successful, earn the rewards and build wealth.
Clinton cites Brazil as a country of high taxes that is also growing and where poor people are improving their lot. Well, not so fast. Here is what she said compared to a State Department profile of Brazil that was updated in February after Clinton had been in office for one year:
“Brazil has the highest tax-to-GDP rate in the Western Hemisphere, and guess what? It’s growing like crazy,” she said.
Actually, the State Department report on Brazil states its “GDP dropped 0.8% in the first quarter of 2009.”
The Tradingeconomics.com research firm shows that the U.S. economy, which Clinton believes does not tax enough, has out-preformed Brazil.
Brazil has experienced sluggish GDP rates, averaging 1.61% in 2007 before the world recession hit, compared to the U.S. averaging 2.5%, according to the firm’s inflation-adjusted numbers.
After the recession hit, Brazil’s economy was sluggish just like the U.S. economy. Brazil grew by 1.39% in 2008 and 0.96% in 2009, compared with -1.83% and 0.18% for the U.S., respectively. In other words, Brazil’s economy is hardly “growing like crazy,” as Clinton asserted.
What’s more, while Clinton praised Brazil’s high-tax society, the State Department report criticized it: “Significant vulnerabilities remain in the Brazilian economy. The total tax burden is high, income distribution remains skewed, and the private business community complains of burdensome regulation. The global financial crisis has hampered President [Lula da Silva's] efforts to accelerate economic expansion.”
The report has more criticism for Brazil’s tax system:
“In order to attract increasing levels of FDI [foreign direct investment], many business groups and international organizations have highlighted the need for Brazil to improve its regulatory environment for investments and to simplify the tax code.”
The State Department report does not credit high taxes, as Clinton does, for Brazil’s growth. But it does single out somethings she rarely talks about: turning government-run enterprises over to private business.
The State Department said: “Many antiquated and burdensome state management structures that operated in the sector have been dismantled, though some of them still exist.
…
Clinton had one fact correct: Brazil has the highest percent of tax revenue (38%) compared to total GDP. Clinton credits those taxes for improved economic performance.
…
Let’s fact-check another Clinton assertion about Brazil. She said at Brookings: “The rich are getting richer, but they’re pulling people out of poverty. There is a certain formula there, that used to work for us until we abandoned it — to our regret, in my opinion.”According to the CIA World Factbook, the percentage of Brazilians living below the poverty line is 26%. The 2000 edition said Brazil had a poverty rate of 17.4% in 1990. You might argue that Brazil’s embrace of high taxes has created more poor, not fewer.
Facts don’t matter to Clinton and Obama. They are ideologically committed to taxing not just the “rich” but also the middle class and those entrepreneurs risking their savings to build private enterprises. They want to “spread the wealth around” as Obama famously said to Joe the Plumber during the 2008 election campaign.
Clinton and Obama don’t care that taxing a country’s wealth makes everyone poorer and hurts lower income people disproportionally. We recently posted a twenty year old confrontation between former British Prime Minister Margaret Thatcher and a Labor member of Parliament where she exposed the fact that Socialists would rather have everyone be worse off rather than let successful people build wealth that creates jobs for everyone else.
{ 1 comment… read it below or add one }
Hillary can chant ‘tax the rich’ because she is talking about an income tax, not a wealth tax.
If the Democratic Party were to propose a real tax on wealth, Hillary and Bill would become Republicans faster than you can say Monica Lewinsky.
Many of the super-rich are liberals precisely because they understand the difference between income and wealth.
A man with zero assets who earns $300,000 on which he pays a 50% income tax will be giving up 50% of his wealth.
Another man with $100 million in assets earning 3%, on which he also pays a 50% income tax will be sacrificing only 1.5% of his wealth.
The ‘progressive income tax’ is actually regressive in terms of wealth. It keeps the poor, poor, while preserving the dominance of the super-rich.
For more on this, see: http://www.capital-flow-watch.net/pbrbc
Thomas Jefferson wrote:
“Taxes should be proportioned to what may be annually spared by the individual.”
Note, he said ‘annually spared’, not ‘annually earned’. He was talking about a tax on excess wealth, not income.
In contrast, it was Karl Marx who proposed the ‘progressive’ income tax.
{ 1 trackback }