How much is the fair share of tax for the rich to pay? And what is the type and amount of wealth that defines someone as rich? President Obama accuses his opponent of not paying his fair share of taxes. In other words, Mitt Romney is a tax cheat. In still other words, Mitt is a deadbeat.
History can be a powerful teacher. We can learn from past experience what does and does not work, so let’s go back a few decades. In the mid 1960s, George Harrison of the musical group the Beatles wrote the song “Taxman.”
“Let me tell you how it will be
There’s one for you, nineteen for me
‘Cause I’m the taxman, yeah, I’m the taxman.”
These words referenced the 95 percent income tax rate the Beatles were forced to pay the British government. That meant for every dollar the Fab Four earned, the British government confiscated 95 cents of it. The Beatles did what so many others in England did at that time: They left the land of their birth and became tax exiles, and they took their money with them.
It was the economic policies of conservative Prime Minister Margaret Thatcher that finally brought many of these tax exiles home. She spearheaded the reduction of a punitive, crippling tax burden. The idea behind this move is that people should not be punished for working, and if they are not punished for working and achieving they will stay in a country and invest their wealth in it.
When John Kennedy became President of the United States, the income tax rate for upper income achievers was 92 percent. President Kennedy and Congress slashed that rate. Later presidents and congresses reduced it further.
Unfortunately, in Britain and America and so many other countries what has not been slashed is the size and scale of government. The fundamental premise of free marketers, like Mitt Romney, is that cutting taxes in conjunction with reduced government spending creates greater wealth for the majority of people. The free market system works, not because it is a perfect system but because it is the safest one. A nation of a few hundred million people freely making their daily economic choices is far better and safer than when a handful of bureaucrats impose their various pet economic theories on the rest of us.
Today’s election will decide which direction this country takes. You have an important decision to make. If you look at the lessons of history, you will know how to vote.