Sunday, July 1, 2012

Marco Rubio's One Trick Pony

Okay...okay, "one trick pony" is not really the right phrase, but "Excalibur sword" was used by Jon Stewart in his interview with the Senator on the June 25th Daily Show.  Nobody gets to the heart of an issue in an interview like Jon Stewart.  The man is great at seeing how the rhetoric doesn't match the reality.

Marco Rubio said over and over "the only way to solve the problem is growth."  Now on the surface this makes sense, but it really no more an "only way" than winning the lottery is the only way for me to become a millionaire.

Somehow this seemingly bright and articulate man drank the kool-aid and actually believes that anything that  hinders growth - regardless of the benefits or soundness - will never be acceptable to Republicans.

"How do you shrink the deficit?" Jon asks.

Grow the economy"  Rubio responds.  "The government will generate more revenue (through jobs produced from that growth producing more tax payers) and that (tax) revenue will be used to pay down the deficit."

This ideological purity is based on an acceptance of the "job creator" concept.  That is, if you let the rich - those with money to invest - keep their money (e.g. 15% instead of 39% tax) they will invest it in growth and a person without a job "paying zero taxes" will become a person making 50 to 80K a year which will then be taxed.

"I would most like to see much rather those people (rich) take that money and invest it," Rubio tells Jon, :to grow their business or start a new one.  And you (Jon) would much rather have them give it to government and the government would spend it on something."

How can an idea that sounds valid - growth producing jobs which produce tax payers - not be the prudent course of action?

"Tax increases don't generate growth," Rubio states.  "If you leave it in the economy they will use it."

Okay, so let's look at this objectively:

Assuming that growth is the only answer, will the government or the individual produce the jobs needed to produce the revenue needed to run the government and pay down the debt?

First, let's get a few "facts" on the table so we can take them off and objectively answer the question:

1) New business require funding to get off the ground.
2) The government wastes money with bureaucratic requirements and inefficiency.
3) The obligations of the government are just that, obligations, and must be paid for regardless of benefit to the individual paying the tax.
4) The purpose of a business is to generate wealth for its stake/stock holders.  How that wealth is defined is irrelevant to that goal.

If you cannot accept all of these, then you drank the kool-aid and my argument will fall flat.  I am wanting to explore the idea that growth is "the only to solve the problem."  If it is the only way, then growth must take place in a way that produces the tax payers needed to fund the government's current needs.  That's Rubio's understanding and, if I take him at face value in this interview, he will not accept anything that can be seen as hindering the potential for that growth.

Right now, the idea of a tax increase - any tax increase - is seen as hindering growth and will never be considered by Rubio and I suspect, the rest of his Republican cohorts.  Okay, so let's accept that any additional tax will hinder growth thereby creating a new tax payer.  For growth to be "the only way to solve the problem" then all money not taxed must be invested in growth that generates more tax payers (from no job paying zero to a new tax payer making $80K).

Well maybe not "all the money" but more of it must be used to create growth and new tax payers than what the government would create if it, instead, received said money through additional taxes on the person.

This is, in my opinion, a fair question to ask.  Let's look at Mr. Romney as an example of "how the only way to solve the problem is growth" plays out in the real world.  First, let's make sure we have the word growth defined.  Rich folks have seen their fortunes rise and they are doing "pretty well" as Jon says, speaking of himself as one of these well off folk.  Growth, as Rubio makes the case, must create new tax payers from those currently not paying taxes (listen to the interview).

So the question now is (and not to pick on Mr. Romney but his tax rate and revenue is known), how many new tax payers - growth - did the untaxed money Romney got to keep create?  If guys like Romney are job creators, do they actually create more jobs than the government would create if it instead taxed them at 39%?

For Rubio's "only solution is growth" model to work to both fund our government and pay down the debt, new tax payers must be made at a rate that exceeds what the government would create and/or do with that money.  If you think guys like Romney are job creators, then we should see all that untaxed money go into creating jobs for our fellow citizens, or else Rubio's model will not work and he is hindering what is best for America by not allowing other models to be considered.

Did Mitt Romney's untaxed money create the necessary new tax payers to make Rubio's model a plausible course of action and not just an ideological myth?

Next Post: Mitt Romney's $5.46 million dollars created how many new tax payers?


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