I’ve got a question for my readers who are of the Democrat persuasion (or anywhere left of that.. socialists and marxists are free to respond as well).
I’m going to make a broad assumption that you all want the Federal Government to spend more money on entitlements (welfare, health care, social security, etc). Obviously, there are some exceptions to the rule, but this seems to be the overarching theme of most liberal Democratic ideas. Give more money to more people that need it.
Here’s my question. If you want to give more tax revenue away to those in need, why do you also want higher taxes? The case has been made, pretty well in my opinion, that increasing taxes will end up netting less revenue for the Federal Government. If that is so, wouldn’t the smartest idea be to cut taxes to the point where it brings in the most revenue for you to spend? Let’s look at a graph courtesy of dalefranks.com
This is called “The Laffer Curve”, named after a professor at Pepperdine University (Go Wave!). The basic idea of this graph is that when your tax rate is 0%, the federal government will bring in 0 dollars. As that tax rate increases, the amount of money the federal government brings in rises until a certain point is reached (we don’t know where that is) and revenue starts decreasing because the incentive to produce goes down as tax rates increase. So once you get to 100% tax rates, revenues are once again zero.
This is important to understanding how any income tax system works because the goal for a government is to have the lowest tax rate that brings in the most revenue. The problem is, no one knows exactly where certain tax rate delineations are on that graph. It may very well be that the current 35% top bracket rate is at the peak of that graph. I think its obvious that its not on the other side, because as all of us know (or should) since the Bush tax cuts, revenue to the federal government has increased much faster than was even expected. The deficiet has been shrinking the past couple years (though I’m sure it will increase as the current party in control of both houses of congress is planning the biggest tax increase ever) because we CUT taxes. Cut in taxes… increase in revenue.
So I ask, why do you want higher taxes?
The only thing I can come up with is that you want to promote class warfare in order to keep yourselves in office. As long as you keep telling the poor and the lower middle class that you are sticking it to the rich, they will keep your guys in office.
Tell me I’m wrong here and that there’s some other reason besides hatred of people who produce?