Friday, January 05, 2007

Sane Tax Policies

A bi-partisan bill introduced into the senate calls for abolition of the dreaded AMT, the tax meant for the rich that has been snaring more and more middle class Americans in it's tangled web. Read about it here. The bill may not pass the house and senate because there is a perceived drop in tax revenues. I say "perceived, " because the that's how the Democrats think. They link lower tax rates mean less tax revenues, when the opposite is really true. Why? Because when people keep more of their money, they are motivated to make more, save more and spend more. The more they make, the more income is there to be taxed. The more they spend, the more robust the economy is, which creates jobs which in turn creates more incomes tax revenue. The more they save, the more capital is available for business investment in the form of stocks, bonds and bank loans. If the government keeps the money, it doesn't stimulate the economy because government is a drag on the economy, and because government spending doesn't stimulate GDP the way private handling of the funds does.

But the Democrats don't understand that. There view of life is tax people with money and give it away to people who don't have money in the form of entitlements and government programs which will in turn eliminate poverty, which will make America a great country and we can all feel good about ourselves. But that won't actually happen because the poor will waste any money they get as will the government, and they will remain poor. But I digress.

Elimination of AMT will be good for the middle class, good for America, and even good for the poor, because jobs will be created that they can have if they want them.

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