Every year, the President of the United States addresses the nation via the legislative branch on the floor of the House of Representatives to discuss his policy proposals for the year. It is usually the time when the President is in the spotlight and nearly 330 million people are watching him. Tonight was President Biden’s night, but it was a painful, long, boring, and redundant oratory exercise to watch. The central theme of his hour-and-a-half speech focused on unity. Yet, the President did not hesitate to through his punches at those with whom he did not agree.
This State of the Union was particularly painful to watch because the President made a lot of inaccurate economic statements for political expediency. Indeed, President Biden lengthily talked about economic inequality, especially, the unfairness of the tax system being advantageous to the wealthy. The President claimed that corporations and billionaires do not pay their “fair share.” This famous word has been a key electoral catch in the lexicon of the Democratic Party. President Obama, Senators Elizabeth Warren and Bernie Sanders, and Vice President Kamala Harris have all used that word in the past to rally political support. President Biden also claimed that corporations and billionaires are paying less taxes than school teachers, and such condition is unacceptable. He then promised to quadruple the tax rate for corporations and make billionaires pay their “fair shares” because according to him, billionaires and corporations are getting wealthier every day while not doing much.
On moral grounds, sure this situation is unacceptable, but there is also a reason why billionaires and corporations generally pay less taxes than everyone else. Indeed, billionaires and corporations pay less taxes than ordinary people because our tax system favors business owners. Most of the wealthiest people in America are business owners of very large corporations. Indeed, most of the Forbes 400 became rich by applying their ideas in industries where new technologies allowed their firms to become very large. Business owners are the innovators of the goods and services that we consume and enjoy every day. The tax system rewards them for the risk they took by starting a company knowing that there is no guarantee that the company would succeed. If business owners are taxed at the same rate as employees, then these business owners and corporations would not have the necessary resources to create value and wealth for society.
By claiming that corporations and billionaires should pay their “fair share” the President attempts to blame wealthy individuals and large institutions for the financial struggle that most middle-class and working-class families are going through. Capitalism is not a zero-sum game system where in order for one to be rich, he must impoverish someone else. It is a system of production and exchange where any person who has an idea and could scale that idea could then become rich in the process by providing value. These large corporations are large essentially because ordinary people are willing to purchase products and services that these corporations sell them. Consumers are not forced to consume something they do not want to. Amazon, for example, is essentially a very large corporation because ordinary people purchase goods every single day on the e-commerce platform, which significantly increases the total revenue of the company.
The President’s speech was disheartening to watch, especially in this very part of his speech. His speech only fueled more resentment from people who already believe that capitalism is a zero-sum game. His speech incentivized those who lost faith in capitalism, to continue resenting the very system that made this country the richest nation in the world.
Comments