Tomorrow’s primaries are again filled with drama for the Democrats. While Obama clearly has the momentum, Clinton could steal it here and make for a dogfight all the rest of the way. With many of the “superdelegates” on her side, Hillary can swing things. We’ll see what happens. Hillary’s been increasingly desperate, and that hasn’t really been working for her. But she’s staying the course now.
The reports that some of the African American superdelegates dedicated to Clinton are getting pushed to switch to Obama by others in the black community is sad, but not surprising, again showing the inherent within those who take certain things to an extreme.
On to the topic of the day:
Thought I’d talk about taxes this week. A government must have a way to get money. A state must have funds to do the work it is tasked to do. The most popular way to do this is taxes.
The income tax is not actually constitutional. It was instituted by FDR and never taken away, even though the country survived without it for a good century or more. Since then we’ve increased taxes, gradually, and seen some of the highest tax increases in the last twenty years (#1 was signed in by Bill Clinton … #2 belongs to George Bush, Sr.).
The “Bush tax cuts” are a main topic of many of the candidates, on both sides. Generally, Republicans are interested in maintaining those tax cuts while Democrats are generally against them on principle. These are broad generalizations, but still true.
Raising taxes does raise revenue, but many times it also causes the economy to slow down. This happens for a couple different reasons. Businesses have to raise prices to deal with the cost of new taxes. People buy and invest less because they have less money or have the perception of less money. People lose jobs this way, unemployment goes up, yada yada, you are in a little recession. This happened with George Bush, Sr. He was elected, partially, on the slogan, “no new taxes.” Then he signed the biggest tax increase in the history of America (designed by a Democratic Congress). Two years later we were in a recession he wouldn’t admit to having.
Cutting taxes increases revenue even more. This has been proven time and time again throughout history. Why does this happen? Well, the opposite of reasons from before. People have more money. Businesses have more money. Inflation is low because general costs are down and people are spending more money and investing. This creates more jobs, which creates more income, which pays more taxes, which increases revenue.
Raising taxes is a vicious cycle. You always have to keep raising them, hurting the economy, and receiving little actual increased revenue in return. Cutting taxes does the opposite. It creates way more revenue for the government and improves the overall economy. Interesting to me how the liberals can see how the increase of gas prices is hurting the economy but seems oblivious to how raising taxes does the same thing.
Therefore, if a state wants to create more revenue for programs or new issues to solve, it needs to cut taxes. It really is pretty simple.
Now, some are saying, Reagan cut taxes, why did the deficit go up? Because spending increased more than revenue. Reagan cut deals with the Democratic Congress so that he could increase military spending. His increased military spending was paltry compared to the increased domestic spending through welfare and other social programs instituted in the 80′s. Look up the budgets through those years. It is astounding how those programs expanded compared to military spending … and yet Reagan’s military spending is blamed for the deficit.
Under Bush, Jr., same issue. Revenue did go up after his tax cuts, but spending also increased, more than revenue. This spending isn’t all military, either. Bush has signed a whole lot of pet Democratic projects into being to make friends and show he can try to work with the Democrats, which of course he will get no credit for, either from the Democrats or from the media. But he did. Therefore, the deficit continues to increase.
America is dangerously close (some say she already is) to oppressing its people with taxes. Almost every empire that has failed (Rome, China, etc) also overtaxed its citizens, proving not its strength but its weakness. It is the sign of a weak nation to keep raising taxes.
Think about it. I work my whole life. I pay taxes on my income. I save the money I have left. I buy a big house. I am a good steward of my money. When I die, my children would have to sell the house and give most of the money to the government if I happen to have accumulated too much stuff over my long lifetime (the very popular tax). The tax refunds I get from the government (stuff they were not supposed to take in the first place) is taxed again the next year as income. Taxing things once isn’t good enough? We have to have a system where things are taxed two, three, four times?
There is a whole lot of deceit about tax cuts, as well. The Democrats, and by proxy the media who repeat the phrase, say “tax cuts for the rich.” They, for whatever reason, want to raise taxes, so they use buzz words like “for the rich” to make their point. And then people ignorant of facts just repeat the phrase. How do they justify “for the rich”? I’ll explain.
Someone with an income of 30k pays 25% in tax (I’m making numbers up to prove a point, but stick with me). Someone with an income of 500k pays 50% in tax. Let’s say we cut taxes by 1%. The 30k income pays 24% instead and the 500k pays 49%. Because of the difference in income, the 500k guy keeps more money than the 30k guy … even though the cut for them both is the same. Therefore, tax cuts “benefit the rich.” They made more to begin with!
But that doesn’t really matter, because liberals and their graduated income tax work on a pseudo-Robin Hood mentality. “We rob the rich and give to the poor.” They come in on their donkeys to save the day, all the poor people. “Those rich are evil people and they don’t deserve their money. We’ll take it from them legally and give it to those who need it. Vote for us!”
The problem with this is that in Robin Hood, the evil rich people were the government. They were the ones oppressing through high taxes that the people couldn’t bear. If we were true Robin Hoods, we would take that example by taking the money they’ve already taken from us and giving it back to the people who actually earned it.
And don’t be fooled by this economic stimulus package by the Democratic Congress. They are giving you money. During an election year. You’ll have to report that money as income (again … you already reported it once, but you have to report it again when they give it back to you), and once the Democratic president raises taxes … a lot … you’ll end up owing them more next year than they gave you this one.
So what is the solution for the Church? Well, biblically, we’re just supposed to pay taxes. There are no biblical mandates for high or low taxes in the scripture, necessarily. So we are responsible for paying taxes.
And the Church shouldn’t be concerned for itself, at least, about recessions or increased taxes. God will provide basic needs no matter what happens. Many don’t believe that, in their heart, but He will.
But if the Church is to fight for the oppression of the poor, who do you think suffers more from economic crises? Looking back through history, of course the poor do. Should we willingly support a system that is inherently oppressive and dishonest? I don’t know that its our job, as the Church, to fight either way, only that history and facts definitely don’t dictate that I support such a system.
Peace.
Really good post! I got to the end and wasn’t bored…a topic that doesn’t always interest me.
Watch out…you’ll be Michael Kruse soon! Ha.
Cheers.
Actually, raising taxes can very easily lead to lower revenues. This has happened just about any time the government raises taxes on luxury products, or capital gains. Income, too. If your tax base is on something that is somewhat optional, raise the taxes, and people will choose other options. Other luxury items. Other investments that aren’t as highly taxed. Choose to take more benefits (stock options, retirement funds matching, etc) rather than income.
In general, when the tax rates are too high (as they are now), raising them will generally provide lower revenue than if the tax rates had been left alone.
Cutting taxes can also reduce revenue. But for that to be true, taxes have to be REALLY low to begin with. Which is not where we’re at right now.
Of course the FairTax fixes most of that. By having a flat, broad tax base on consumption (with no consumption tax until you spend past the poverty level), the tax base is very stable, and economic decisions are based more on their net benefit to the producer and consumer than on their tax consequences. Which would fuel economic growth and reduce barriers to economic mobility more than any other idea around.