What gain has the worker from his toil?
Ecclesiastes 3:9 ESV
President Obama caused quite an stir at a recent campaign stop when he explained to business owners that “they didn’t get there on their own,” that they shouldn’t attribute their success to being “smarter” or “harder-working” than others and that they shouldn’t stand in the way of paying higher taxes because the government played an important role in their success and because business people “are doing just fine” anyway. You can read the complete transcript of President Obama’s remarks to see it all in context.
I have to confess, like most red-blooded American business people, I found his speech off putting and troubling. But what troubled me wasn’t his claim that successful people aren’t “self-made.” I agree with him on that. No one is self-made. Everyone’s had help along the way, and plenty of it. And those of us who believe in the LORD believe that all good things come from Him anyway.
No, what troubled me about the President’s remarks was his claim that successful people have the government to thank for their success; and the related position he takes that if we just had more government, we’d have more success to go around.
I’m sure there are some people in this country who owe a great debt to government programs for their personal success. But the vast majority of us everyday people who work on Main Street in everyday businesses and do everyday jobs, aren’t among them. It’s our hard work and resulting tax dollars that pay for the government.
And while the government has an important role to play in this, or any country, the simple truth is that we already have more government than we can afford. The Federal Budget calls for our government to spend 3.8 Trillion dollars in 2012. This is 68% of the total annual income earned by all Americans ($5.6 Trillion) according to the most recently published IRS data. In plain language, it would take 2/3 of every dollar every person in this country makes to pay for the government we already have.
Because a 68% tax rate for all Americans is an obvious non-starter, the government is operating at a huge deficit (about $1.3 Trillion a year). The President’s call for higher taxes on the wealthy is understandable. He knows that huge deficits are not sustainable and that government spending is scheduled to increase even more in the future. The problem with his argument is that raising taxes on the wealthy is nowhere near enough to pay for current government expenditures. Even if we were to tax every family making over $200,000 a year at the 68% rate (which is more than anyone is currently proposing) we would still have a $700 billion annual shortfall. There just aren’t enough “rich” people in this country to pay for the government we already have!
The obvious answer is that we need to reduce government spending (in the 25-30% range) to a level our country can sustainably afford. This includes reducing military spending, which is over 20% of the budget. Take a look at a guide to our current federal budget and tell me if you think you could balance it any other way.
We also need an environment where we don’t berate people for their success or promote the notion of entitlement. We need to encourage private citizens to take risks, launch new businesses, hire more people, get back to work and make more money.
We need an environment where making good money is seen as something positive again. Because when people are encouraged to do something, they do more of it. And when they are discouraged from doing something, or rewarded for not doing it, they do less of it.
Chairman & CEO