Saturday, November 06, 2010

Cutting taxes for the rich truly boggles my mind

The richest 0.1 percent of taxpayers would get a tax cut of $61,000 from President Obama. They would get $370,000 from Republicans, according to the nonpartisan Tax Policy Center. And that provides only a modest economic stimulus, because the rich are less likely to spend their tax savings.

At a time of 9.6 percent unemployment, wouldn’t it make more sense to finance a jobs program? For example, the money could be used to avoid laying off teachers and undermining American schools.
I think the American people need to understand one simple fact - taxes form the main revenue stream for the government. The government uses part of this money to fund programs all over the country. More importantly, taxes serve to reduce the national budget deficit. I have heard politicians talk about lowering taxes and lowering the budget/trade deficit in the same breath; this is a mathematical impossibility. It is, I repeat, IMPOSSIBLE.

Republicans complain that income redistribution - the act of taxing the rich and distributing the taxes among the poor - isn't in the Constitution. I agree. But, vetoing and blanket dismissing initiatives that increase taxes on the rich using the fear of "Income Redistribution" is specious and misleading. The revenues from such tax increases can be put to other uses.

Update: Gruber has an interesting take on this as well

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