Obama's press conference.

[TheRealMafoo]

So I Obama just had a press conference, and while he said a lot that sounded good, for all of you watching, I want to point out one major flaw.

At one point, he said that the current plan is funded two thirds, and they are trying to figure out how to pay for the last one third. aside from the fact that of that 2/3, 200 billion of it is good faith savings from the health care industry, let's just talk about that 1/3.

Obama basically said the only thing he is going to sign, is a plan that gets the 1/3 from the rich. Right now, congress is talking about getting it from people who make 1 million or more, and if that gets to Obama's desk, he will sigh it. His ideas are a little different, but basically it's to collect the funds from the same group of people (the rich).

Here is the problem.

Over the last 60 years, the tax rate on the rich has been as high as 91% in the 1950's, and as low as 28% in the 1980's, and just about everything in between. Today it's around 35%. Every one of those years, the rich paid 19.5% of GDP. This indicates that no matter what you tax the rich at, 19.5% of GDP is what you are going to collect from them. Raising taxes on the rich does not increase GDP. In fact, almost all economists think the opposite. But even if it doesn't, you could double there tax burden, and you will not collect more money from them.

So, Obama is trying to pass a bill on expected dollars, that he will never see (or at least history tells us he will never see).

Here is my question. Why don't they raise taxes this year, to pay for a plan that starts next year, and only use funds they collected for the plan, to pay for the plan? That way, they know how much money they can spend?

Why doesn't Washington ever do this?