Cheat Seeking Missiles

Update: I just might have no clue what I’m talking about.

iven what the housing slump has done to a big bunch of my clients, I don’t have to worry this year about going over $250,000 in income and being subjected to federally imposed charitable giving. But if I were anywhere close, you can bet I would be doing my budgeting to finish 2009 with $249,999 in adjusted gross income.

This reaction by small business owners to the Obama wealth transfer plan is so obvious, you have to wonder if the Obama econ team has considered it in their budget and their deficit projections. They’re not talking about it, and all indications are they think folks will cheerfully join them in voluntary wealth redistribution. If that’s the case, their income projections will be way off, because successful people all across America will be turning on the success retro-rockets.

And here’s one of them, from a letter that appeared in the LA Times:

I have employed about 50 people during the last 20 years, and my family’s taxable income is about $300,000. In order to avoid paying a higher percentage of taxes on all of my income, I will decrease output, lay off some staff and still end up keeping the same amount.

I have no incentive to hire people or expand my business, because the more I make, the more President Obama will take to expand government. This discourages expansion of the private sector. It will backfire with disastrous consequences for all.

It is repulsive that Obama is being allowed to take this country backward by pickpocketing the very people who run the private sector through their energy, money and creativity.

Kay Santos
Diamond Bar

One could argue that Santos is uncharitable, but that’s a specious argument. Charity is voluntary, not forced, and is utterly disconnected from the all-American desire to pay the lowest amount of taxes legally possible. I say “all-American” because everyone from George Soros to Rush Limbaugh does it.

Someone with a better head for numbers and better data could compute the impact of success retro-rocketing on IRS receipts, but here’s my clumsy stab at it: According to 2000 Census data, there were 2,532,939 households in America making over $240,000. There are certainly more now, but let’s work with this number, which is the best I can find on the Census site. Assuming this number is low-loaded, in other words, there are far more people close to low end than the high end, I’ll guess conservatively that as many as 40 percent of this group earned between $250,000 and $350,000. That’s 1,013,176 taxpayers who could easily opt-out of Obama’s forced march into charity by doing what Santos says she’ll do.

I realize that Obama is much more interested in redistributing the wealth of the folks that are earning way, way over $250,000, but there are still two valid points to be made about the million people who could voluntarily become less successful to skirt Obamanomics:

Having a million folks scale back their earning potential will have a much greater impact on the economy than just the reduced taxes, as they will lay off workers, reduce hours and salaries, and reduce production, impacting their suppliers.
Having a million folks actively involved in civil disobedience will have a profound psychological effect on society.

I doubt if Obama has even bothered to think about this. He’s looking at the larger picture - wealth redistribution - and is forgetting the details. But you know what they say: The devil is in the details.

Hat-tip Michelle Malkin, who hat-tipped my neighbor, American Power.

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