John Ransom

By Bob Beauprez 

Whatever a politician chooses to call it, when the government takes more money from a business or and individual, it is a tax increase. Additionally, how can government - even a president - determine what is a "fair" portion to confiscate of income earned by someone else?

The tax code is full of special incentives that at sometime in the past made sense to Congress and presidents who signed off on the legislation in order to encourage investment in favored industries or products.

Incentives may include things like the ability to more rapidly depreciate purchased assets, deferred tax liability, or deductibility of some classes of expense. If the president and/or Congress want to revisit any of the existing incentives, fine. Maybe the desire to encourage certain types of investment no longer exists. But, at least be honest enough to admit that eliminating a tax incentive amounts to a tax increase, and not camouflage what government is doing behind some phony "fairness" demagoguery.

Politicians who like to increase taxes also cling to a fantasy that they can do it with economic impunity. But, the economy is not static. Invariably when government taxes something more, you end up with less of it, and less of any part of the economy means less jobs associated with that industry. 

Back in 1990, Congress slapped a 10 percent tax on luxury yacht believing as Obama does now that rich people are easy to demonize and that they would still buy yachts anyway. They didn't. Sales fell off by 70 percent in one year and a quarter of the jobs in the industry disappeared. The tax was notoriously disastrous and was eliminated two years later. With 9.1 percent unemployment, is this really a time to risk putting any more Americans out of work? 

Obama has chosen to single out some industries that he thinks are currently out of favor with a majority of people. If you knew nothing about the tax code or the reality of the numbers, you would think that eliminating a couple of these so-called "loopholes" would solve the deficit. In reality he's talking pennies on the dollar when comparing any imagined new revenue to the size of the budget deficit. In the spirit of "fairness" we should all call the president's rhetoric what it transparently is - shameless re-election politicking.

Bob Beauprez is a former Member of Congress and is currently the editor-in-chief of A Line of Sight, an online policy resource.

John Ransom

John Ransom’s writings on politics and finance have appeared in the Los Angeles Business Journal, the Colorado Statesman, Pajamas Media and Registered Rep Magazine amongst others. Until 9/11, Ransom worked primarily in finance as an investment executive for NYSE member firm Raymond James and Associates, JW Charles and as a new business development executive at Mutual Service Corporation. He lives in San Diego. You can follow him on twitter @bamransom.