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Schiff: Taxing the Wealthy Won't Cure Financial Woes

The CEO of Euro Pacific Capital, a Westport based company, says reducing the size of government is the answer.

 

As America approaches the fiscal cliff, Republicans and Democrats are still working through negotiations to see if a deal could be struck before the end of the year. If nothing is done, tax cuts enacted on the richest Americans under President George W. Bush would expire, raising the tax rate on those earners from 35 to 39.6 percent.

But raising taxes on America's wealthiest earners won't help fix America's bleak finances, according to Peter Schiff, a Weston resident who is the CEO of Euro Pacific Capital.

Schiff, who unsuccessfully sought the Republican nomination for Connecticut's U.S. Senate seat in 2010, wrote an op-ed piece published in the Wall Street Journal last week which seeks to debunk President Barack Obama's notion that taxing the rich at higher rates—which has been done in the past—will help America climb out of yearly deficits and ever-increasing debt. Schiff took to CNBC recently to defend his op-ed

"Raising taxes on the top two percent—they're already paying more than their fair share," he said. "Increasing taxes on that group isn't going to solve the problem. We do need to dramatically cut government spending, and if we fail to do that, then we're going to have to increase taxes dramatically on the middle class. The fiscal cliff is just a small down payment on paying the piper. We have to pay for all this government. The big mistake was growing government."

Schiff said the wealthiest are already paying more than enough in taxes. In his op-ed, he said that while the tax rate on the wealthiest has fallen since the 1950s, the tax burden has remained relatively flat because almost half of those who file taxes pay none. 

"Right now, I'm paying 45 percent of my total income in income taxes, both to the state of Connecticut and to the federal government, and if you take the three percent Medicare tax," he said. "After the tax hikes go into effect next year, more than half—more than half of my total income is going to go to the government. You tell me, what's fair about that when medieval serfs pay 25 percent, I'm paying half. I don't care what the majority voted to do, they don't have a right to steal my money just because they vote for it."

And what will happen if taxes are raised on the rich?

"You know what the wealthy are going to do," Schiff said. "They're going to invest more abroad, they're not going to work as hard, they're not going to pay as much in taxes, they're not going to employ as many people. Their employees are going to pay all the taxes."

chris December 11, 2012 at 04:59 PM
He is absolutely right, taxing more hasn't gotten us anywhere but more in debt.. I sure do hope all these TAX CUTS our governor and state rep are talking INCLUDE cuts to THEIR SALARY AND BENEFITS... why should they get it when we all can't afford to pay it, we stay poor while paying it and they live high on the hog.... this has to end with all government honchos........
Bart Shuldman December 11, 2012 at 08:05 PM
Governor Malloy should call Obama and tell him how he has ruined CT with his tax increases and to get Obama to stop this nonsense. CT raised taxes on almost everyone, including the middle class and also on 200 new items and our revenue went DOWN. We are now running a huge budget deficit and will see cuts across the board. Obama is just trying to divide the nation. While Warren Buffet continues to say he wants to pay higher taxes, the increase proposed by OBAMA does none of that. It just taxes people who are already paying their fair share. Buffet and Romney must both be laughing. They will continue to pay less. Peter Schiff is right. We need to cut spending as we are seeing in CT. Malloy granting 4 years of no layoffs and continued use of overtime for pensions. it is killing this state. Spending is up and revenues are down. The same will happen with the OBAMA tax increase. Ridiculous. Revenues will go down, and spending will continue to go up. Our deficit will increase and our debt, now at $16 TRILLION will go to $17 TRILLION. $17 TRILLION!!!!
Brian December 12, 2012 at 11:44 AM
So why exactly are so many corporations sitting on their money?
Judas Priest December 13, 2012 at 06:17 PM
Corporations can do whatever they please with their money. Higher taxes, low interest rates, more regulations, and economic instability result in hoarding. Policies should encourage investment, not hinder it. So the answer to your question is "Government."

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