Tuesday, January 27, 2009

Stimulus

I was thinking today that there is no difference between the government running a budget deficit because they spend more than the treasury takes in and running a budget deficit because the treasury takes in less than the government spends.

With that being said, it is a proven fact that when the federal tax rates are reduced, revenues to the federal government increase (I am sure this phenomenon occurs at other levels as well).

So in light of that, instead of spending $1 Trillion+ this next year to "stimulate" the economy, why don't we cut taxes dramatically? Put a moratorium on all corporate taxes, capital gains taxes, payroll taxes, income taxes, death and estate taxes, etc. and let that stimulate the economy. Then after the moratorium lower all of those to historic levels and watch the revenues soar, and at that point the government can go waste all the tax revenue that our booming economy is bringing in.

Obviously this is a broad proposal that wouldn't work in exactly this way, but why give the auto companies a bailout when you could give them more room to breathe by eliminating their tax burden. And if for them, why not for all American business? And if for American business, why not for the American worker?

Lower taxes = more money for people and business to spend = stimulated economy = more tax revenue = more government spending (which is the only proposal on the table)

IT MAKES SENSE!!!

The best suggestion on the table is the FAIR TAX, visit: www.fairtax.org

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