A few days ago Hillary Clinton sat at the Brookings Institute and spoke on our new National [In]Security Policy. While doing so, she branched into domestic politics and said the following:
"The rich are not paying their fair share in any nation that is facing the kind of employment issues [America currently does] — whether it's individual, corporate or whatever [form of] taxation forms."
Now this is a very populist statement. It wins votes for your political party because most people don't consider themselves wealthy and they hear a statement like this and they think 'yeah, that's right! Government is on my side! It's those wealthy people hoarding all their money and not helping out us poor folk.' Most people will avoid the inconvenient fact that 50% of Americans pay no tax or that the wealthiest 1% of pay 39% of all taxes (the wealthiest 25% pay 84% of taxes). Hillary thinks that's not their fair share. If Hillary would read history she would discover what happens when you continue to increase tax rates on the wealthy.
Turn back the clock to the early 1920s. Do you want to know why the roaring '20s became the roaring '20s. Prior to 1920 Woodrow Wilson was president and his administration hit the wealthy with tax rate increase after tax rate increase with the result that with each rate increase the government actually collected fewer tax dollars from the wealthy. So when Warren Harding was elected he ordered his treasury secretary to commission a study looking into why that was happening. The findings aren't surprising. With each tax rate increase the wealthy sent their money into investments overseas where it wasn't taxed as highly. So between 1921 and 1926 Harding dropped the tax rate on the wealthy from 73% to 25% while lowering the rate on the poorest taxpayers from 4% to 1.5%. The result? The tax take from the wealthy TRIPLED! And the poorest taxpayers paid less. And the national debt fell by 33% and America saw unprecedented economic growth during the 1920s. Hmm. That's interesting isn't it? So, you're saying that lowering tax rates on the wealthy actually brings in MORE tax dollars from the wealthy? Yes. Because they'll start investing in America again.
Not a popular thing, though, for a politician to stand up and say 'hey, we need to lower taxes on the wealthy.' Actually, lowering taxes on everybody (yes, *gasp* even the wealthy) makes perfect sense. The wealthy are the ones running business. They are the job creators. Government talks about tax penalties for companies that take their jobs overseas. Well, what needs to happen is the government needs to realize that they have created a tax environment where it is much cheaper for business to do business in China or the Phillipines. Why doesn't government realize that lowering tax rates here, in America, would be an incentive for businesses to stay here. Well, that would require common sense and government has none of that. And it would also require our leaders to know American history and we see in Hillary's example that this is simply not the case.
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Troy, you continue to impress me with the stout ideas that flow from your blog. Nice job.
ReplyDeleteMy two cents (even if you don't like it).
Our national debt/dilemma is not going to be solved with one major policy shift. I think that your idea to lower taxes in America so that we can once again begin to invest in ourselves is SMART. But our government just passed all that legislation to encourage companies to take their business out of our country. They are never going to reverse that.
Speaking of History, we can once again look to the Romans as a warning of things to come. The early Roman Empire was full of hard working farmers and industrious people.
Later, the people began to see themselves as more and more an elite people. They became lazy. No longer did they work the fields or vineyards. They purchased slaves to do all the labor. Then, when slaves were released they took their labor elsewhere.
The end result was a country that could not produce enough grain or other necessities to provide for the LAZY populace. The vast majority of food stuffs had to be shipped in from Egypt just to keep the government and city from collapse.
So, in a nutshell, when you take away peoples God-given right to produce, to pay taxes and to be a part of the society, you ironically take everything away from them. They lose what little dignity they have.
What really makes me angry is the idea that 50% of our population pay NO TAXES! What a travesty! I would like to see what the average cost to America those homes represent in money paid in programs and welfare.
It is unreasonable that they pay NOTHING into the system that protects them, unfortunately provides for them, and educates their children.
Just think of the debt we could eliminate if each of those families paid 0.5% in taxes each year. What a whopping balance that could make for at least semi-rationalizing their use of so much welfare.
God bless us. Please.
Well I didn't mean to suggest that lowering taxes is the cure-all. Actually I think decreased spending is more important. The depression of 1920-1921, which in many ways was worse than the "Great Depression" was stopped cold in its tracks by, among other things, a 65% slash in federal spending. Now why don't we hear about that in our history books. Why is it that we only learn about the massive federal expansion of FDR. Many economists argue that FDR's programs, though not ALL bad, prolonged the depression and made it deepen. 1920 may have been much, much worse if not for a White House that understood fiscal conservatism.
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