Opera News

Opera News App

One Bad and Five Good Reasons to Cut Taxes

Kofi_kp
By Kofi_kp | self meida writer
Published 17 days ago - 1 views

Advocates of high taxes have denounced President Bush’s preferred tax‐​cut argument–it will help the economy–as outmoded Keynesianism. They have a point.


In his first address to Congress, Bush said, “To create economic growth and opportunity, we must put money back into the hands of the people who buy goods and create jobs.”

That sounds like the old Keynesian idea made popular during Franklin Roosevelt’s New Deal: Cut taxes and increase government spending to “prime the pump” during a recession; raise taxes and reduce spending to slow down an “overheated” economy. Keynesianism seemed to have been finally laid to rest in the 1980s when President Ronald Reagan argued for a tax cut on supply‐​side grounds, and even liberal economists now agree that such fine‐​tuning has little effect on the economy.

But one weak argument doesn’t mean we shouldn’t cut taxes. Here are eight good reasons for a cut in income tax rates:

1. In a free country, money belongs to the people who earn it. The most fundamental reason to cut taxes is an understanding that wealth doesn’t just happen, it has to be produced. And those who produce it have a right to keep it. We may agree to give up a portion of the wealth we create in order to pay for such public goods as national defense and a system of justice. But we don’t give the government an unlimited claim on our money to use as it sees fit.

2. Private individuals and businesses use money more efficiently than governments do. People with their own money at risk spend or invest it carefully. You don’t find many $600 hammers or insolvent retirement programs in the private sector. Money will do more good for more people in private hands than in government hands.

3. High taxes discourage work and investment. Taxes create a “wedge” between what the employer pays and what the employee receives, so some jobs don’t get created. High marginal tax rates also discourage people from working overtime or from making new investments. It’s true, as some critics say, that our current marginal rates of 39.6 percent (somewhat higher when combined with other taxes) do not depress economic output as much as the 70 percent rates that taxpayers faced in 1980. But most economists now agree that a reduction in marginal tax rates will increase output to some degree.

4. Income taxes should be cut because the overall tax burden is quite high right now. As of the third quarter of 2000, federal revenues as a share of the gross domestic product hit a peacetime high of 20.8 percent. Prosperity has made Americans more accepting of the rising tax burden, but the current economic slowdown will make high taxes harder to bear.

5. If we don’t cut taxes, Congress will spend the money. If one thing is certain in Washington, it is that Congress will spend every dollar it can get its hands on. Every interest group wants something–a road, a dam, a social program, more teachers, more policemen, more corporate welfare–and members of Congress want to be liked. The only way to “put the surplus in a lockbox” is to let the taxpayers keep it.

Content created and supplied by: Kofi_kp (via Opera News )

Opera News is a free to use platform and the views and opinions expressed herein are solely those of the author and do not represent, reflect or express the views of Opera News. Any/all written content and images displayed are provided by the blogger/author, appear herein as submitted by the blogger/author and are unedited by Opera News. Opera News does not consent to nor does it condone the posting of any content that violates the rights (including the copyrights) of any third party, nor content that may malign, inter alia, any religion, ethnic group, organization, gender, company, or individual. Opera News furthermore does not condone the use of our platform for the purposes encouraging/endorsing hate speech, violation of human rights and/or utterances of a defamatory nature. If the content contained herein violates any of your rights, including those of copyright, and/or violates any the above mentioned factors, you are requested to immediately notify us using via the following email address operanews-external(at)opera.com and/or report the article using the available reporting functionality built into our Platform

YOU MAY LIKE

DKB Allows Fan To Measure His Head On The Streets Of Accra, See The Size Given To Him To By The Fan

2 hours ago

16 🔥

DKB Allows Fan To Measure His Head On The Streets Of Accra, See The Size Given To Him To By The Fan

How To Use Candle When Ironing Your Trousers To Make Them Look Brand New

5 hours ago

37 🔥

How To Use Candle When Ironing Your Trousers To Make Them Look Brand New

Here are some safely tips during fasting most especially Ramadan.

6 hours ago

4 🔥

Here are some safely tips during fasting most especially Ramadan.

"The Issues Facing The Nation Remain Unaddressed And Our Problems Keep Compounding"- Prof Kwaku Azar

6 hours ago

60 🔥

The Top 7 Richest Clubs In England

7 hours ago

852 🔥

The Top 7 Richest Clubs In England

A Bag Of Cement Is No Longer Gh¢38, See The New Price

8 hours ago

17416 🔥

A Bag Of Cement Is No Longer Gh¢38, See The New Price

Are Unions Facing a Crisis? Labor Unions Are Divided on New Salary Base Pay

8 hours ago

3168 🔥

Are Unions Facing a Crisis? Labor Unions Are Divided on New Salary Base Pay

Hojbjerg, Bale and Reguilon miss out on Tottenham-Man Utd Ultimate XI

8 hours ago

157 🔥

Hojbjerg, Bale and Reguilon miss out on Tottenham-Man Utd Ultimate XI

Social Buzz : Meet The Oldest Known Identical Twins Alive In Ghana - See Pictures

9 hours ago

756 🔥

Social Buzz : Meet The Oldest Known Identical Twins Alive In Ghana - See Pictures

Meet Titi the only daughter of Sarkodie

10 hours ago

2218 🔥

Meet Titi the only daughter of Sarkodie

COMMENTS