In a July statement to the House Financial Services Committee, Fed Chairman Ben Bernanke expressed support for extending some of the Bush tax cuts set to expire at the beginning of 2011. Predictably, liberal pundits and politicians became apoplectic at the thought of some people being allowed to keep a little bit of their own hard-earned money.
Much has happened since then. The American people returned the GOP to majority status in the House, and significantly reduced the Democrat’s stranglehold on the Senate.
President Obama cut a deal with Republicans, then took to the teleprompter to compare the GOP to terrorist hostage-takers, and Democratic heads are exploding all over the country over the prospect that some people might get to keep some of their own money – a concept Democrats call “giveaways”.
Liberal Democrats seem to think that all money is theirs, and all jobs are created by government programs, and the media is all to happy to push that bit of propaganda. After all, they see the American people as stupid sheep, so why not?
But with unemployment hovering around ten percent and the economy in a sustained downturn, tax cuts are the only real way to stimulate the economy and provide jobs.
To understand this, one must first realize who it is that pays taxes in this country. According to the National Taxpayers Union, in 2007 the top one percent – that is, those who earn $410,096 or more – paid over forty percent of all personal federal income taxes. In the same year the bottom fifty percent – those who made less than $32,879 – paid less than three percent of all personal federal income taxes.
So, what happens when people get to keep more of their own money? They spend it; they invest in companies; they buy things like cars, houses and computers; they start their own companies and hire people. This provides the stimulus our economy needs, and has the added benefit of providing more revenue to the government.
Historically, every time taxes have been cut, the economy improves. This benefits everyone, naturally, as people have more disposable income and are able to purchase things or start businesses. When taxes were cut in the 1920’s revenue to the government increased by over 60 percent, and the same thing happened when President Kennedy cut the top marginal rate to 70 percent. President Reagan’s tax cuts caused revenues to increase by over 50 percent.
In order to be truly effective in reducing the national debt, tax cuts have to be balanced with spending cuts. Congress needs to learn to live within its own means, just like every family and business in the country. Unfortunately, our current political class – aided and abetted by a sycophantic lapdog media – has rejected the lessons of history. They would rather peddle bumper-sticker slogans to get re-elected than deal with reality.
Winston Churchill once noted that, “A nation trying to tax itself into prosperity is like a man standing in a bucket trying to pull himself up by the handles.” The next time a liberal politician sheds crocodile tears over “tax cuts for the rich”, tell him or her, “you bet!” Let’s cut taxes on those who pay the lion’s share of the bill and who provide jobs for average Americans. While we’re at it, let’s cut taxes for everyone else. After all, it’s our money.