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Cutting Taxes for the Rich Never Ends Well

Flat tax would cut taxes only for the rich, which never ends well

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From what I understand, there is a correlation between the top tax rate and unemployment- the higher the top tax rate, the lower the unemployment rate. The lowest unemployment rate we've had over the past 100 years, I think was about 1 1/2 percent- and I think that happened when the top tax rate was in the 90's! How could it be that unemployment was so low when we were taxing the "job creators" the most? This is what I think:

As a business owner, I pay all the bills- AND I pay myself! There are a certain amount of things that I have to pay- employees wages and benefits, the cost of materials and whatnot, utilities and on and on. Then there are things that I COULD spend money on- or I can pay myself more! I could hire more employees if demand increases for my products- in a period where there's a lull in demand I can upgrade my equipment in anticipation of a turnaround or maybe I can plan on a future expansion! All that stuff- and stuff like it costs money that I don't have to spend. I can keep it instead. The nice thing about doing it all though it this: I don't pay any taxes on it! Every red cent that I spend on my business I write off- and I'm not taxed on it AT ALL!!

So what happens if you lower my taxes? All that means is that I can take more home. I can invest it- overseas. I can live a little more lavish lifestyle! Nothing that's going to be any kind of boost to job creation- or the economy. But what if you RAISE my taxes? If the top tax rate was 90%- I'd probably do everything that I could NOT to be in the top tax bracket! I'd put almost all the money that I make back into my business where I'm not paying ANY taxes on it- and build my wealth on paper instead of in the bank. I might expand my product line. Whatever.

In any case, lowering taxes is not an incentive to get business owners to grow themselves and the economy. "Oh- they're lowering the tax rate on the money that I'm paying myself! I think I'll build a new facility!!" That really doesn't make any sense.

Jeffrey Morgan of OR 3:13AM March 12, 2012

How about the bottom 50% pay something? If they paid taxes then their impression of government would not be as rosy. If you don't pay taxes, why do you get a say in who gets elected?

gary of MD 3:21PM February 07, 2012