Alan Colmes, the Left and Deficits: Liar, Liar, Pants on Fire

President Obama, as you know, came out with a truly disgraceful proposed budget--so disgraceful that even the committed leftists of the mainstream media criticized him for total lack of leadership in tackling the budget deficit we have (projected to be 1.65 trillion dollars this year, and which the Obama budget will not materially reduce for the foreseeable future).

Well, Alan Colmes is nothing but a political hack, and a walking, talking receptacle of leftist talking points. Colmes was on O'Reilly on Tuesday night, and tried to defend the Obama budget and the SPENDING with Orwellian style LIES. Since the lies were lies I had previously heard from leftist Democrats and people in the mainstream media (leftists, of course, as well, as almost all of the mainstream media people are), I decided they were worth noting in an article.

The firest LIE is that "taxes are at the lowest level, in comparison to GDP, since World War II". I actually think that Colmes said: "Taxes are at the lowest level since World War II", but I am giving the more complete formulation. Balderdash. This is not only a lie, but a multi-level lie. It assumes the further lie that taxes and REVENUE (government) are the same thing. That, also, is a LIE. It is the assumption upon which the other LIE is based.

What is true is that SPENDING, as a percentage of GDP, is at its highest level since World War II (close to 25%--a truly terrible level). Colmes even managed to LIE here--asserting that spending is at a low level, in comparison to GDP, when adjusted for inflatioin. An absolute lie. PERCENTAGES do not need to be, and cannot be, "adjusted for inflation". The FACT that spending is at its highest PERCENTAGE since World War II conclusively PROVES that we are NOT "living within our means" (as Obama DISHONESTLY asserts we have to learn to do--dishonestly in that there is no evidence he even knows what that means, much less how to do it).

Back to the original Colmes LIE--which I have heard repeated multiple times. It is absurd to suggest that tax rates are lower now than they have ever been. Remember REAGAN? That is in my lifetime. Income tax marginal rates were definitely LOWER then. Reagan, of course, proved that tax rates--within reason on the low end--are UNRELATED to revenue. You can LOWER taxes and INCREASE government revenue. Reagan did. More importantly for the Colmes lie, since he would surely dispute what I just said on increasing revenue by lowering tax rates, revenue has much more to do with the ECONOMY than with taxes.

Thus, government REVENUE is at a low, in comparison to GDP (a ratio, again, which means it is independent of inflation adjustment). However, that merely shows how BAD the Obama economy is. Or, if you prefer, it shows how bad the DEMOCRAT economy is, since Democrats have controlled Congress since January of 2007 (with hardly any obstacle from President Bush in his last two years). It odoes not matter how high taxes are, if most people are earning LESS MONEY. In fact, the higher you raise taxes, the less money people are going to earn. Thus, it is an Orwellian Big Lie to say that "taxes are lower" because REVENUE is lower. They are simply not the same thing. Revenue--even revenue from income taxes--is NOT the same as the LEVEL of taxes. No, this is not a matter of opinion. It is a fact, and Colmes is a LIAR (as are all of the people on the left--including "econoists"--who say this).

There are all kinds of things that affect revenue besides income tax rates. But a simple thought experiment shows you how there is no direct relatioinship between tax rates and revenue--even aside from the obvious fact that people do not pay taxes on money they DO NOT EARN (as when their wages and earnings disappear). Say we have a 100% tax rate on all earnings over $100,000. How much extra revenue will we get?

No, you don't need any further information. The correct answer is NONE. We will LOSE REVENUE for the government (as sooon as people realize what is happening). Why is that? It is because NO ONE will earn over $100,000, if they don't get to keep any of it. They will move out of the country. They will hide earnings. They will engage in a thousand and one gimmicks to avoid going over $100,000 in COUNTED earnings. But no sane person will earn money merely to turn it over to the government. Thus, government REVENUE will decrease, even though you have confiscatory taxe rates that are killing the economy.

Just remember that this "advancedd" reason that tax rates and revenue have no direct relationship is NOT the primary reason that Colmes is a Liar. Tax rates are entirely separate from revenue, although high tax rates can kill revenue, because tax rates are applied to EARNINGS to generate revenue. If EARNINGS are way down, such as in this extended recession, then revenue will be way down. That is wwhat has happened.

Yes. there is another possible factor that MIGHT be lowering revenue, even though tax RATES are higher than the Reagan years (and first Bush years). It is POSSILBE that people are getting ever smarter in EVADING taxes (probably legally, but some maybe even illegally). Note what happens if you RAISE tax rates in such a situation. This is a test. THINK about what will happen.

Did you get the right answer? You should have. Yes, raising tax rates will merely INCREASE tax evasion (legal and illegal). If we have HIGHER tax rates and LOWER revenue, then there is an obvious disconnect between tax RATES and tax REVENUE. That disconnect is primarily because of lower EARNINGS from the recession. But tax evasion could be a factor. Either way, RAISING tax rates will only INCREASE the problem of a disconnect between tax rates and reveneu. It will lower earnings, AND increase tax evasion.

Q.E.D. Alan Colmes is a political hack and a liar.