www.baltimoresun.com/news/opinion/oped/bs-ed-taxing-the-rich-20121211,0,6900864.story

baltimoresun.com

How taxing the rich hurts all of us

When the wealthy pull back, the poor and middle class are left holding the bag

By E Dee Monnen

1:52 PM EST, December 11, 2012

Advertisement

Forty-five years ago, I bought a set of electric curlers. They were made in America by Americans. They seemed expensive at that time. As it turned out, I was wrong about the price. After thousands of uses, they turned out to be a superb bargain — and then they died. As I tossed the old rollers into the trash bin, I felt like saying a eulogy to a bygone era when everyone could find a decent job, even if it were a boring, repetitive job on an assembly line, wiring a set of hair curlers for a young teenager. At least those factory jobs kept the rent paid and food on the table, and there was a reasonable expectation of health insurance. Many high school graduates got their first job at one of these factories, and they stayed there until the factory was sold to an overseas interest.

Most towns in Maryland seem to have an empty factory or two. The Baltimore area is dotted with them.

I replaced my rollers with a $50 set made in China. I don't know how long these foreign-made curlers will last or how many lost American jobs they represent, but they don't work as well, and the design is not nearly as good.

There are many reasons for our lost manufacturing jobs, but for the most part, it boils down to the United States having the highest corporate tax rates in the world and countless cumbersome regulations. Over the years, our politicians have pushed manufacturers overseas, and with fewer companies to tax, politicians have come up with another scheme to get more money. It's called "tax the rich." One would think that cutting spending ought to be the first consideration for balancing a budget, but that solution is foreign to a politician's mind. After all, it was a politician who came up with the idea of baseline budgeting (automatic annual spending increases). Baseline budgeting ensures that our federal government will never spend less money than in a previous fiscal year.

"Taxing the rich" is actually a misnomer. Two of its chief proponents, President Barack Obama and Gov. Martin O'Malley, are quite clever to demand that the rich pay more, which gives the illusion that the poor and middle classes are spared. The president campaigned on this deceit and continues to do so, though he knows that when he taxes the rich, the poor ultimately foot the bill. He banked on the fact that the underprivileged and the unsophisticated classes would not figure it out. He was right.

And did Governor O'Malley honestly believe his "millionaire's tax" would only affect the wealthy? To dodge Mr. O'Malley's higher taxes, millionaires and their money have left our state in droves, putting a greater tax burden on the middle class. And the millionaire business owners who have decided to stay simply tacked their additional tax expense onto their goods and services.

The Chapwood Index measures the financial pain consumers endure when businesses raise their prices. Higher taxes and government regulations are the primary inflators of an entrepreneur's goods and services. The index is calculated on a quarterly basis after measuring the price increases of the top 500 items used in households. Things like milk and toilet paper are among the numerous items. Last year, the increase in the Baltimore area was 10.3 percent. The first half of 2012 saw a 6.2 percent increase — 12.4 when annualized — and I bet you didn't get a 22.7 percent raise in the past two years to compensate.

So the next time politicians in Annapolis or Washington, D.C., tell you that they're only taxing the rich, remember that higher taxes on the wealthy will cause everything from what you put in your fridge to what you put in your gas tank to cost more.

E Dee Monnen is a writer from the Eastern Shore. Her most recent book, "The Little Black Dress Code Book: Everything Mothers Want Daughters to Know About Style (But Are Afraid to Say)," is currently available as an e-book. Her email is eonjasper@goeaston.net.

  • Text NEWS to 70701 to get Baltimore Sun local news text alerts