http://www.rejectliberalism.com/articles/taxcutschris7-27-04.htm
WHY TAX CUTS HELP EVERYONE
By

Sources:
http://www.sba.gov/advo/stats/sbfaq.html
http://www.nationalreview.com/nrof_nugent/nugent092401.shtml

http://www.rejectliberalism.com/articles/taxcutschris7-27-04.htm
WHY TAX CUTS HELP EVERYONE
By

designed to create class division and envy and cause the working class to
question the intentions of Republicans who advocate cuts. However, this
focus on the discrepancies between tax cut rates and actual dollar amounts
received is a red herring, as the more important indicator is progress of
the lower economic classes, not making judgments on how obscene a

rich person's salary might be.

Actually the Democrat obsession with "tax cuts for the rich" and the
supposedly growing gap between rich and poor is classic Marxist garbage.

is an egalitarian sentiment that is wholly misplaced. I personally don't
care how rich the richest of us are as long as the average guy is getting
along and seeing his conditions improve as well. The fallacy of the

obsession with the inequality of earnings is that their solution to it-to
effectively limit earnings of the rich through heavily progressive
taxation-only really hurts the little guys in the end.

The reason for this is that rich people spending money makes the economy

in America and really around the whole world. Rich folks buy big houses,
fill them with furniture and gadgets, they buy expensive cars, eat at
expensive restaurants, take expensive vacations, send their kids to

schools and universities, and more. All of these activities requires
somebody, or typically lots of somebodies, on the back end building and
manufacturing the things rich folks buy and providing the services the

use. If we suddenly cut the disposable income of the "rich" in half
tomorrow, unemployment would become rampant and businesses providing these
products and services cut back and/or go out of business.

As Tom Nugent wrote in National Review in 2001, the Democrats received a
hard lesson in supply-side economics back in the late 1980s. Planning to
soak the greedy rich, Congress imposed a huge luxury tax on the purchase

leisure yachts. Predictably (for those of us who understand how

works), the rich did not end up paying the tax. Instead, they simply

buy the yachts. Demand for domestic yacht sales plummeted and, more
importantly, over 120,000 yacht industry workers lost their jobs.
Ironically, many of these workers were probably the very people the
Democrats intended to benefit from the social spending they thought the

tax would allow. Let me ask you, do you think the "little guy" was better
off because the rich paid higher taxes in this case?

Disposeable income spending by the wealthy is only one aspect of the rich
driving the economy. Rich people start businesses. More accurately,

that start successful businesses often become rich. If rich people

money is the lubricant that greases the sleds of our economy, the American
small business is the duct tape that ties all industries and sectors of

economy together and provides the vast majority of employment growth.
Through tax cuts, small business owners have more income to re-invest in
their companies. No, they do not hoard their tax cuts in mattresses and
piggy banks, they put the money to use by growing their businesses. This

the natural tendency of companies in the capitalist system, to expand and
grow. When companies grow they hire more people and can create better
paying jobs.

All of this increased economic activity feeds on itself. The growth

more income earners with more money to spend. Even more growth is fueled

a result, and amazingly enough, because total economic activity increases,
tax revenue to the government can and does actually go up. This is the
essence of Reagan's much maligned "trickle-down economics." Through
spurring greater economic activity, tax cuts actually increase tax

while improving economic activity for average people. Even John F.

everyone's favorite Democrat, believed in this methodology as he offered

unprecedentedly large tax cut as President in 1962.

Now that we have justified tax cuts to the wealthy, lets look at a related
claim. No matter what the nature of the tax cut, Democrats always like to
say that the bulk of the cuts went to the rich. This is a matter of
statistical manipulation. We all know 10% of $100,000 is more than 10% of
$10,000. So you see how two people could get the same cut in terms of
percentage but the one who earned and paid in more to start with gets more
back in terms of total dollars. Yet some people insist that this is not
fair and claim that the rich should pay a higher percentage in order to

"their fair share." The Liberal justification for this is the inherent
unfairness of capitalism. To a Democrat, for anyone to get rich and be
successful in America, he has to have screwed some poor people to do it.
Therefore, it is only "right" that he pay a greater percentage of his

to the government, because we all know the government can make better
decisions about how to spend that money than each of us can individually.

This reveals another great fallacy the left owns about government. Every
Liberal believes the greater good is achieved by giving money to the
government. Somehow they cannot allow or are unwilling to depend on
charitable contributions from individuals. How liberals who give no money
to charity but advocate higher taxes for all can be considered more moral
that Conservatives fighting for lower taxes AND giving tons to charity is
beyond me. And, much like the environmental hypocrites who drive SUVs and
then demand alternative energy sources, Liberals want higher taxes for you
and me, yet they still itemize their tax returns in a quest to pay the
minimum amount owed. Perhaps if the 20% of persons calling themselves
Liberal in this country would pay extra into the IRS, we wouldn't need to
raise taxes on the rest of us to pay for all the social spending the
Liberals want in the first place. It is no coincidence the U.S. is the
lowest taxed large economy in the world and also the most generous nation

terms of personal charitable giving. Raise taxes and you remove money
available to individuals for contributions.

What's more efficient and equitable? Individuals making personal choices

to whom and where to give charitable donations, money that is received
directly by those doing the good work, or giving money to the government,
which will suck away and waste most of it in bureaucratic overhead,
resulting in fewer net dollars available to the end user to provide social
services? We should have the right to choose for ourselves how, when and
how much of our money should go to compassionate causes. Further, we

be the ones to decide which causes are compassionate based on our personal
definitions of the word.

Back on topic, lets talk about small businesses. Many small business

started small. Many self-finance to get the operation off the ground.
Higher taxes mean less money in the pockets of entrepreneurs. Without

businesses we'd be in a world of hurt. Lets take a look at some

from the Small Business Administration concerning small businesses in the
U.S.:

Small businesses in the United States.

· Represent more than 99.7 percent of all employers;
· Employ more than half of all private sector employees ;
· Pay 44.5 percent of total U.S. private payroll;
· Generate 60 to 80 percent of net new jobs annually;
· Create more than 50 percent of nonfarm private gross domestic
product (GDP);
· Produce 13 to 14 times more patents per employee than large
patenting firms. (This is a critical indicator of entrepreneurialism,
invention and innovation);
Employ 39 percent of high tech workers (such as scientists, engineers, and
computer workers );
Are 53 percent home-based and 3 percent franchises;
Made up 97 percent of all identified exporters and produced 29 percent of
the known export value in FY 2001.

Additionally, the SBA notes that in 2002 there were approximately 22.9
million small businesses in the United States. In terms of job creation,

SBA notes that in 1999-2000
small businesses created three-quarters of U.S. net new jobs (2.5 million

the 3.4 million total). Over the decade of the 1990s, small business net

creation fluctuated between 60 and 80 percent of all new net jobs.
Moreover, according to a new Bureau of the Census working paper, start-ups
in the first two years of operation accounted for virtually all of the net
new jobs in the economy.

Let us be sure to define "net" new jobs. We hear job creation figures
kicked around a lot. Bush lost 2 million jobs, Bush created 1 million

etc. Lets forget for a moment that presidents do not create jobs at all.

in the year 2000, we had 100 million jobs for example, and in 2001 we
created 1 million but lost 500,000, we have a net of 500,000 new jobs for
that year.

Of the total number of jobs in the United States, the SBA reports that the
small business share of total employment has remained steady at around 50
percent. Interestingly enough, SBA says that although small firms create
more than half of net new jobs, some small firms will become large firms

new jobs are created. This is a significant point-that small firms

blossom into corporate powerhouses. After all, Microsoft and Dell were

small businesses run out of the house at one point in their histories.

notes that of 114.1 million nonfarm private sector workers in 2000, small
firms with fewer than 500 workers employed 57.1 million, large firms, 56.9
million. Smaller firms with fewer than 100 employees employed 40.9

It is easy to see that small businesses are the lifeblood of the vibrant

economy. We can also see that because our economy is so dependent on

business job creation, that even modest increases in top end tax brackets
can have negative effects on the amount of money available in the economy
for small business entrepreneurialism, business growth and job creation.
What is the best way for government to promote small business? Get the

out of the way and let the American people pursue their dreams!

Capitalism is about risk taking. The market rewards those who have a good
idea and capital to invest in it when the idea is sound. Taxation at any
level has a depressive effect on such risk taking. Ideally, we would have
no taxation of any kind-unleashing the maximum amount of risk capital into
the economy. Obviously this is not realistic, we do have schools to run

roads to build and armies to send to fight off terrorists. However, the
desires of Liberals to tax and tax to fund their ambitious and misguided
social programs serve to inflate taxation beyond what is reasonable. As a
result, money that would otherwise be circulating in the economy creating
jobs, is taking the form of a check for welfare recipients who would
otherwise have those jobs, and generally going to dozens of other social
programs that have sometimes noble goals but questionable results.

Heavy taxation discourages entrepreneurialism and acts as a disincentive

succeed. Ultimately, all taxation does-at any level-is depress economic
activity. If you own a business and taxes go up, it just increased your
cost of doing business. You either have to cut expenses or increase

to compensate, which almost always means passing the tax along to the
consumer. Which brings me to another point about taxation that I cannot

credit for. Mr. Walter Williams once said businesses do not pay taxes.

can this be, you say? Sure, they may write a check to the IRS and other
state and local entities, but they do not actually pay for the tax, you

Every cost of doing business is built into the price of the product or
service that business sells. Eventually every tax gets passed along to

ultimate consumer, which is always the private citizen. We have no
customers of our own to pass our costs along to, other than our employers,
and as employees we rarely get the opportunity to arbitrarily raise our
prices (cost of labor, i.e. your salary) to compensate for increased
expenses.

The simplest way to explain the point is the sales tax. Most states

the sales tax on retail businesses. The legal burden to pay the tax is on
the company, not the consumer. However, the tax is simply passed along to

as an additional price. Adding the tax at the cash register is merely a
marketing gimmick. Ever been to a furniture sale where it was advertised

store would pay the tax on your purchases? In reality they are simply
giving you a discount on the final sales price equal to the sales tax

They are already paying the tax on the sale regardless of whether you pay
them extra for the tax or not.

Imagine going into your boss's office and saying. "My property taxes just
went up 5%. As a result I'm going to have to raise my prices 2.3% for next
year to compensate. Just a cost of doing business, you know." I don't
imagine it would go over very well. But business do it all the time and
before modern conservatism brought us the wonderful concept of the tax
revolt, government did it all the time and to a degree still does

sometime every day in the United States. We can clearly see that raising
even corporate taxes ultimately increases your own personal cost of

since all those taxes aggregate from business to business and are

built into the products you and I buy.

Lets talk more about the "gap between rich and poor." What is never
reported in these discussions is that the vast majority of the poor do not
stay poor for their entire lives. A significant portion of "poor"

are young, and from census to census they will gain work experience,

promotions and generally clime the economic ladder. There is a tremendous
amount of turnover within the poor classification. That is the great
strength to our system, people traverse economic strata every day. So it

generally erroneous to suggest that the rich and poor groups are static

unchanging, and therefore something is owed from the rich to the poor when
most of the rich were probably poor at one point in their past.

Sources:
http://www.sba.gov/advo/stats/sbfaq.html
http://www.nationalreview.com/nrof_nugent/nugent092401.shtml

--
Atheism teaches that there is no God, hence no God-given rights. That
ideology coupled with a system that believed in the superiority of the

at the expense of the individual was murderously synergistic.