Bob King: America not broke, just undertaxed

I just returned from hearing Bob King tell the Detroit Economic Club that “America is not broke!”

The real problem, the United Auto Workers president says, is not a shortage of resources, but that the country is leaving those resources in private pockets.

Higher taxes, King says, will fuel an economic boom, alleviate social misery and bring fairness to our land.

But relax — he doesn’t mean higher taxes on everyone, at least not yet. For now King wants more to be taken from the wealthy and corporations.

He’s particularly concerned that some corporations are using loopholes to avoid paying taxes. And he is beside himself because the capital gains tax has not been raised. He called for European style income tax rates to finance European style social spending.

King draws no correlation between Europe’s high taxes and spending and Europe’s growth — which has been stagnant for a quarter century — or Europe’s unemployment, which is institutionalized in the 10 percent range.

Nor does he notice the European nations such as Greece, Spain, Italy, Portugal and Ireland that are teetering toward insolvency.

And you never hear guys like King acknowledge that when the captial gains tax was reduced to 15 percent, revenues from the tax came in at $84 billion higher than expected because of the growth the cut generated. Assume that if the rate is raised, revenues won’t produce nearly the windfall King predicts.

There’s a good reason King is so strident about tax hikes, which most economists recognize as job killers.

His union is increasingly irrelevant in the private sector, where less than 7 percent of workers belong to unions.

That compares to 36 percent of government workers, and that’s where the growth is.

So what if confiscatory taxation kills private sector jobs as long as it saves and grows jobs in the public sector, where King has a better shot at picking up members?

As a taxpayer, what you need to worry about is what happens when King’s strategy drains the rich and he has to come after the middle class to keep his public sector members fully employed and benefited.