Should the "Bush Tax Cuts" be made permanent or should we tax the wealthy more.
I don’t care if you watch Fox News, MSNBC or one of the mainstream news network shows. They are all yelling on one side that to tax the wealthiest 2% more will inhibit growth of the economy and cut job creation, while the other side yells about favoritism to the rich and famous.
What is the truth of the matter? It sure beats the heck out of me. Neither side ever produces evidence to support their argument; they just rant and rave about the other side.
Let’s set aside ideology for a moment and look at things logically!
When the rich get a tax cut, they either invest the money in a business which will probably create more jobs, but probably not until the economy recovers. Why would they immediately go out and put the money to use by investing in a start-up or hiring new employees in a contracting, or at best, no-growth economy?
When the upper middle class gets a tax cut, it would seem to me they rarely change how they operate financially. They probably pay down credit cards, buy a larger TV, go a little further on vacation and maybe avoid laying off an employee.
When the middle class gets a tax cut, they probably spend most of it on necessities and an occasional night out; or, they pay down a credit card which means the money goes to the bank and sits there.
When the lower middle class gets a tax cut, they immediately spend it.
When the poor gets a tax cut, theyyyyyyyyyyyyyyyyyyyyy oh, yeah. They don’t pay taxes, do they? Instead, the tax laws allows them to get tax credits, such as Earned Income Credit which they immediately spend.
In looking at the above list, then, it seems to me that I have been thinking wrong for a long time, buying into the idea that we couldn’t increase taxes on the rich because it would hurt the economy and jobs. Since the rich use their fat cat lawyers to help them avoid taxes means that the upper middle, the middle and the lower classes are my clients and they could always use more money to hang onto what they have and buy milk, bread, pay rent, mortgages, etc.
Does this make sense to you? If not, where have I gone wrong?
Jerry
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Comments
Tax cuts to the upper and middle class also seem to make sense, as they will either provide money to retailers and/or banks (by paying down debt), who in turn lend it, I would assume. They also are more likely to run a business that is reported under their personal taxes, meaning they would pump that money into more employees.
The poor class should pay their percentage of taxes just like everyone else.
Dare I say a Flat Tax be considered? Perhaps next blog entry.
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