Saturday, December 18, 2010

How about a regressive tax system? ~ By Robert Ringer

Just before it passed through Congress, Robert Ringer had written about the tax deal that was just signed into law yesterday. While the column discusses Robert's idea about a regressive tax system, I have included two excerpts below where Robert brings up specific points about the deal that he has a problem with. Now that Congress has included a 13 month extension to unemployment benefits, (and raised the estate tax back up to 35%, which wasn't mentioned in the column), he feels that it "would offset much, if not all, of that illusory economic stimulus by bleeding vast sums into idle hands."

How about a regressive tax system?

By Robert Ringer

December 17, 2010 ~ 1:00 am Eastern

© 2010

How refreshing it was to read Rep. Michele Bachmann's choice of words when she said, "I called for the current tax rates to be made permanent for all Americans." Finally, a Republican who refuses to use the term "Bush tax cuts" when alluding to our current tax rate.

As I have repeatedly pointed out, when politicians and media pundits talk about the "Bush tax cuts," they clearly are implying that the normal, acceptable tax rates are whatever they were before President Bush reduced them. Claire McCaskill recently summed up this warped far-left viewpoint when she said, "If they think it's OK to raise taxes for the embattled middle class because … we don't GIVE more money to millionaires, it really is time for people in America to pick up pitchforks."

I understand that lefties like McCaskill are hopeless, but I often wonder if I'm the only one who finds it odd when a Republican legislator says, "You don't raise taxes in the middle of a recession." Such a statement implies that it's OK to raise taxes when times are good. Sorry, but there's no such thing as a good time to raise taxes.

If raising taxes is a bad thing to do during a recession, why would it be a good thing to do when the economy is strong? What would be the objective – to try make a strong economy weak? If high taxes are good for the economy, let's have high taxes permanently. But if they're bad for the economy, let's get rid of them altogether.

Republicans will be shooting themselves in the foot if they finalize a deal that includes an extension of unemployment benefits. Why don't we stop kidding ourselves and admit that this insidious transfer-of-wealth program is evolving into a guaranteed minimum income (via never-ending extensions). Sorry, Nancy, but unemployment benefits accomplish just three things: They 1) increase the deficit, 2) cause unemployment and 3) slow economic growth.

No one knows the exact degree of the tradeoff, but the big picture is that in a compromise scenario people would get to keep more of their own money because taxes would not be increased (for now), and some would use it as an opportunity to expand their businesses and create jobs. But the increase in unemployment benefits would offset much, if not all, of that illusory economic stimulus by bleeding vast sums into idle hands.


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