"Tax cuts for the rich" and how they benefit everyone

As everyone already knows, we are in an election year right now.  This means that a number of political issues are coming into discussion yet again.  Bush is trying to get re-elected while Kerry, Gore, and Clinton are trying to do everything in their power to stop him. One of the favorite weapons in the liberal "bag of tricks" is to try and create class warfare. They believe that by portraying the rich as people who are undeserving of their money and exploiting the lower classes they will be able to get the majority vote by swaying blue collar workers.  Moreover, the easiest way for them to do this is to start talking about taxes.  Many liberals try to push the idea that the upper class is undertaxed and that Bush's tax plans work against the lower and middle-classes.  Some of you may know that after Bush got elected, one of the first things he tried to push in the midst of the recession that we were going through was tax cuts.  You may have even noticed that your parents got checks from the government that probably ranged anywhere from $250-800 depending on your family's total income.  I know that my parents were pretty psyched to get a check for a few hundred bucks from the government.

So what do you think most people did with the money they had just gotten?  Maybe they put it under their mattress, or maybe they put it in a savings account where it remains today.  My guess would have to be that it was *gasp* spent soon after being cashed.  It also could have been used to (help) pay off any debts they may have had.  In whatever way the money was spent, it was spent; and the way that a nation digs its way out of a depression or recession is by pumping money back into its economy.  Thus, if a person's taxes are raised they have less money to spend which translates into less money being pumped into the economy.  "But wait Rich, we're only talking about raising taxes for the upper class."  Here's a little secret for everyone: over 90% of America's tax dollars come from the upper class. Therefore, if the upper class's taxes were raised there would be a gigantic amount of money sucked away from the economy.

The next thing that must be taken into consideration is the fact that we are a capitalist society, and as so, it is believed that the person who works the hardest should reap the profits of their labors: this is what creates the incentive to work in the first place. If you punish people with higher taxes, you kill the incentive for them to work harder. And if you don't believe this, than just take a look at communist and socialist countries of the past and present. Alcoholism runs prevalently in a number of these countries because there is no way for an individual to improve their financial situation.  Therefore, it does not matter if the worker shows up sober or drunk, they will get the same paycheck either way.  Moreover, there is no way to get a pay increase so there is no incentive to work harder. This lack of motivation can even be found in a capitalist society when taxes are raised. Andrew Mellon, the Treasury Secretary under presidents Harding and Coolidge once said that, "The history of taxation shows that taxes which are inherently excessive are not paid. The high rates inevitably put pressure upon the taxpayer to withdraw his capital from productive business." If tax rates are low then there is more incentive for someone to try and create more wealth.  However, many liberals have a different way to look at it which I will explain next.

There are many liberals who believe that if you were to raise taxes from say, 33% to 66%, you would double the amount of money the government receives.  The problem is that this thought process uses static analysis which fails to recognize the human dynamic that is involved.  After taxes are raised, a person will most likely keep more of the money they have earned rather than putting it back into economy.  In conclusion, higher taxes lead to taxpayers withdrawing their capital from the economy.  Massive withdrawals of capital from a nations economy can stunt growth have disastrous results, such as the Great Depression of 1929.  I will now move on to why tax cuts are so helpful, especially when the upper class is receiving them.

I've got another secret for everyone.  There have been at least 4 occasions where, after a massive tax cut was passed, the rich actually payed MORE in taxes.  The Mellon Tax Cuts saw an increase of taxes payed by the wealthy from 44.2% to 78%.  The Kennedy Tax Cuts (Revenue Act of '64) saw an increase from 11.6% to 15.1% in taxes payed by the rich.  The Economic Recovery Act of '81 (Reagan's tax cuts) saw an increase of 9.2-9.9% in taxes payed by the rich.  So why is it that the rich actually pay more when taxes are cut?  The answer is that when a person has the oppurtunity to make more money without being punished for their efforts they will take advantage of it.  But, by making more money they will also pay more in taxes.... even without a tax increase.  Moreover, low taxes create the oppurtunity for more people to become wealthy, thus increasing the amount of wealthy taxpayers.  An increase in wealthy taxpayers will turn into a higher rate of tax revenue for the government.  So maybe people who seem to be "anti-rich" should be lobbying FOR tax cuts.  A good slogen would be: "Make the rich pay more, lower taxes."  Of course this would go against all of the standards of class warfare that people like Hillary Clinton and John Kerry have been engaging in on this election campaign.  For example, Hillary was quoted as saying: "We're going to take things away from you on behalf of the common good."  Sorry Hillary, but in a capitalist society you are supposed to be rewarded for success, not punished for it.