America According to Me

Prompted by the stupid letter to the KC Star by Maria Baldwin, I have put together my thoughts on just how wrong she is.  In that letter, Maria claims that trickle down economics didn't work when tried by Reagan and Bush.  I submit that trickle down worked well (note the boon in jobs and economic growth that followed both trickle down attempts).  I suspect that Maria wouldn't recognize success if run over by it.  Let me describe why using a full blog post.

I believe there are 3 economic groups in America:

• Group A contains people who are highly successful.  The vast majority of the top 5%-10% wealthy people in the country were not given what they have, instead they were given opportunity and made the most of it.  Typically, these people have personally risked a substantial portion of their savings and future income, or put in many long hours to accomplish what they have.  They normally don't only do what is asked of them, but exceed expectations as a matter of habit.  They acquired their wealth through hard work and/or taking great personal risk, and are rewarded for this with greater incomes.
• Group C is the opposite of group A.  They are the 5%-10% lowest earners in America.  Most are unskilled and on government support.  Those with jobs earn close to minimum wage, and never do more than put in their required hours.  Many look to unions to take care of them and bring prosperity.  Going "beyond the call" never crosses their minds.  If they stumble upon a windfall, it is not long before they have lost it.
• Group B is where 80%-90% of America lives.  This is the middle class. They tend to behave like groups A and C on occasion, but are not consistently like one or the other.   With consistent behavior a person in class B can easily move into either group A or C.

After defining the different groups, America according to me can be described.  The federal government can make tax and regulatory decisions that benefit one or more of these groups.  The Reagan tax cuts help all groups by lowering federal income taxes across the board.  The expiring Bush tax cuts that are currently a hot topic in Washington helped groups A and B.  They didn't do much for group C because they pay little if any income tax.  Liberals incite class warfare by calling the Bush tax cuts, tax cuts for the rich.  The truth is that virtually any income tax cut proposal today will benefit groups A and B, and not C. 

Tax cuts for Group A are the only effective cuts that have any chance to produce a measure of prosperity.  This is because group A are the people with a proven record of turning opportunity into wealth.  Group A may use favorable tax laws to start a  business or expand an existing one.  The act of creating value through business building does not only benefit the group A, but also groups B and C through new jobs and increasing salaries.  At the core, this is the Trickle Down economics that Maria and other liberals denigrate today.  What is the alternative?
If the alternative were to be pursued, one might call it Trickle Up economics.  This is the same as "spreading the wealth", or socialism - From each according to his ability, to each according to his need (Karl Marx).  Government can and does take money from groups A and B to give to group C.  Their largest program is called Welfare, but there are many others.  Welfare as a safety net is a great idea, but have you ever seen a business get its start or expand because of Welfare?  Are there any significant economic benefits produced by Welfare?  In addition, the act of taking money from groups A and B, suppresses prosperity by reducing the rewards for hard work and risk.

If you were in charge of federal tax law, which group do you think would be most likely to use the tax dollars collected to create new opportunities and economic growth?  If your choice is group A, then why should the federal government take so much if they are only going to give it back?  Does tax cuts for group A make more sense now?  If yes, you too are a trickle down economics supporter and much smarter than Maria.