Is Obama as smart as the leaders of Russia, China, Cuba, or any of the formerly communist Soviet Republics? Or, have the socialists and communists learned a lesson that Obama obviously has not?
Lesson No. 1 is Greece. If income redistribution works, if tax and spend is a model for America, why is Greece a bankrupt basketcase threatening to bring down the entire European Union?
More importantly: Why is Greece, with a 45 percent income tax rate, a 23 percent VAT tax (national sales tax) plus a host of other taxes, still hopelessly bankrupt?
Greeks pay most of their income to the government. Yet Greece is insolvent. With all those heavy taxes, it took $160 billion to bail them out only one year ago. Now they need at least another $50 billion. Why would Obama want higher taxes for America, when Greece proves the model doesn’t work?
All those Greek voters elected socialist politicians because they promised fat pensions, free healthcare, and lavish early retirement. Now they face unimaginable poverty for years to come.
Perhaps Obama should go to Greek’s socialist rulers and ask for advice before we wind up with our own Big Fat Greek Bankruptcy.
Lesson No. 2 is Cuba. Cuba has been a socialist state since before I was born. Their leader Raul Castro is a proud communist. Yet Cuba just passed the most sweeping reforms in history. Castro is slashing more than a million government jobs, cutting entitlements, encouraging more private sector entrepreneurship, giving more power to private companies, and reducing state spending.
One of the trademark features of Cuba’s socialist system — the universal monthly food ration — will be phased out. Castro said the ration given all Cubans since 1963 has become an "unsupportable burden" for Cuba’s bankrupt and crumbling government.
Wow! A Cuban communist leader is cutting a million government jobs, and eliminating Cuba’s version of food stamps. So, why is Obama desperately trying to raise taxes to socialist levels to keep our 21 million government employees all employed (with their bloated pensions) and maintain 45 million Americans on food stamps? Perhaps Castro can give Obama a few pointers.
Lesson No. 3 is Russia. Russian Prime Minister Vladimir Putin seemed to be teaching a common fourth-grade history lesson on socialism when during a speech at the opening ceremony of the World Economic Forum in Davos, Switzerland he stated: “In the 20th century, the Soviet Union made the state role absolute . . . In the long run, this made the Soviet economy totally uncompetitive. This lesson cost us dearly.”
Putin and Castro have learned their lessons from experience. But Obama? Sounds like he needs to attend re-education camp.
Obama's stated game plan is to raise U.S. income tax rates to 40 percent (or higher), eliminate all deductions, take the cap off FICA (Social Security taxes), and of course he’s already passed a raft of new Obamacare taxes. A VAT tax may soon follow. Add it up. Under Obama, Americans could soon have a tax rate of 60 percent to 70 percent (after adding in state, local, and property taxes).
Lesson No. 4 is found in ex-communist countries around the world. Let's contrast their tax rates with Obama's stated goals in America:
- Russia 13 percent Flat Tax
- Bulgaria 10 percent Flat Tax
- Georgia 15 percent Flat Tax
- Romania 16 percent Flat Tax
- Czech Republic 15 percent Flat Tax
- Albania 10 percent Flat Tax
- Kazakhstan 10 percent Flat Tax
So, is Obama smarter than a communist? Ask yourself what lessons those countries learned from socialism that turned them into Reagan-style capitalists.
While Greece and many other high-tax, mixed economies in Europe are floundering, examine how the low tax model is performing around the world. Hong Kong, with its 16 percent flat tax and no capital gains tax, has 3.5 percent unemployment. Their economy is booming. Singapore has a tax of 3 percent to 20 percent, with unemployment at a remarkable 1.9 percent. Their economy is booming. Monaco and Cayman Islands both have income tax rates of 0 percent. Business has never been better.
Greece’s unemployment rate is double digits. High taxes kill, not create jobs.
Wayne Allyn Root is a former libertarian vice presidential nominee. He now serves as chairman of the Libertarian National Congressional Committee. He is the best-selling author of "The Conscience of a Libertarian: Empowering the Citizen Revolution with God, Guns, Gold & Tax Cuts." His website: ROOTforAmerica.com
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