[Obama's] Treasury Secretary Timothy Geithner argued that the Obama proposal would reduce taxes for most Americans. Any increases, he said, wouldn't occur until 2011, when the economy is "safely into recovery."
Geithner said Obama's plan would cut income taxes for 95 percent of families and 97 percent of small businesses. Raising taxes on couples that make more than $250,000 would make the tax system more equitable, restoring the balance that existed before a series of tax cuts were enacted under former President George W. Bush, he said. -- AP 2009-3-4
"Restoring the balance" is completely deceitful rhetoric. He actually means restoring an unfair inequitable system. Even if there were a flat tax of 10 percent, that would mean rich people pay more taxes since 10 percent of $250,000 is $25,000 whereas 10 percent of $30,000 is $3000. Who is paying more taxes with a flat 10 percent tax rate? One pays $25,000; another pays $3000.
The Bush tax cuts do not even go to a flat tax. Our tax system is unfair in that the more income you earn, the greater percentage of that income in taxes you have to pay. For instance if you were a person who made $100,000 per year, and then were offered a job with higher stress, but higher compensation of $250,000 per year, you might not take it. If taxes are raised on the rich, and they have to pay 40 or 50 percent of their income, then that person making $250,000 per year will only be allowed to keep $125,000 or $150,000 of his $250,000 earnings and the government would be confiscating the rest. That kind of thing is considered "fair," "balanced," and "equitable" in the Obama administration.
In a communist system, no matter how hard you work, or what intellectual property you have put into things, your money will be taken away and given to someone else so everyone makes the same amount. Perhaps this is more of what Geithner really means by "equitable."
The reason communist systems fail is that they are truly not fair. People will not work hard anymore -- what is the point? There is no reward for innovation or hard work.
When taxes are raised unfairly on the rich (the ones with capital), they invariable have a disincentive to work. Why invest in starting a new company that would provide a lot of jobs when any extra money you make will be confiscated by the government? The rich then simply begin sitting back and collecting art, etc. No new companies are started. No new jobs are created. The skills and abilities that helped make that high-income earner able to earn money stagnate and that person does not any longer contribute to the GDP of the nation.
What is more, as the economy is harmed by a tax penalty on success and hard work, actual government revenue falls. There are fewer people working at their maximum potential; there is less money earned; there is less productivity; there is less capital being invested in new technology and fewer pushes into new and uncharted industries which carry a higher risk and potential of failure; there are fewer jobs.