Dull As Taxes

Yes, how clever, but truly what is as dull as a discussion of the benefits of higher or lower taxes, yet most people have little or no knowledge of the impact these decisions have on their everyday lives, and never really consider the consequences of a politicians tax positions.

Alan Greenspan recently was quoted stating that tax cuts for the wealthy are not paid for.  Meaning that any tax cut given to the wealthiest 2% of us will directly increase our national debt - which means that all of us will share in paying the ultra wealthy their tax credit.

The argument is that these wealthy individuals are primarily small business owners and that they will plow that money back into the economy via business expansion which creates jobs.  If that were truly the argument, I would be in favor of these tax cuts,  ONLY IF these individuals were required to reinvest these funds into US employment creation;  opening factories, opening stores, opening warehouses, investing in new research and development, new technologies - you get the idea.  But of course, that's not really the argument for these tax cuts is it?

The tax cut you give to one person earning 100 million a year, could amount to a tax cut of nearly $4000 for about 1000 average taxpayers.  My contention is that the tax cut for the wealthy individual creates virtually nothing for the economy.  That additional tax cut simply gets reinvested and saved.  However, the $4000 tax cut for the average taxpayer would create a positive economic impact.  Those consumers will spend much of that money on clothing, vacations, cars, home improvements, electronics, to name a few.  Simply put, greater demand for goods and services will create more employment opportunities, which create more demand for goods and services - a great vicious cycle.  The wealthy individual may buy a 3rd home or a 12th car, but he won't be buying 2000 plasma TV's or 4000 pairs of shoes.

In addition, the average working taxpayer is paying about half their income to taxes - a number that is much too high.  When you combine federal taxes, state taxes, property taxes, benefits taxes (soc.sec., medicare, etc), sales taxes, local municipalities taxes,  it's no wonder that the national savings rates are so abysmal.  While the average wealthy individual pays a much smaller percentage of their total income in taxes - primarily because of the great advantages built into the system by your politicians for these wealthy individuals.  Why do you think the capital gains tax is currently so low?  Why are businesses allowed to avoid taxes in such a myriad of ways?  The answer is obvious - Political clout - politicians bought and paid for.

Don't misread this.  I am a true capitalist.  I love business.  I want everyone to have the opportunity to accumulate wealth.  I want the system to work better, to provide growth and opportunity for entrepreneurs and employment for everyone else.  The "trickle down" theory doesn't work.  If you want tax cuts for the wealthy - fine - let's tie it in to increasing employment. We do have taxation with representation.  Let's use it to represent the will of all the people, not the will of just the wealthy.