I've been thinking about Shrub's tax cuts for the rich. He says that the cuts are needed to stimulate the economy. Let's assume for the moment that this is true. Why should the cuts just go to the rich? The neo-corns say that the rich pay most of the taxes. So, if you want to have a significant tax cut, that's where you have to do the cutting.
Stevie calls BS. If the taxes paid by the lower classes are so small, why not just get rid of them altogether? Why cut the taxes at the top? Cut 'em from the bottom up. Let's make the first $100K in income completely tax free! That would be a tax cut for everyone, not just the rich folks. Here are the benefits:
If an extra tax dollar goes to someone like Junior instead of Richie Fatcat, it will help the economy just as much, if not more. First, Junior is going to get the dollar working right now. If he's got it, he's spending it (probably on beer).
Second, Junior will add more than that dollar to the economy. You might have read that the country now as an average -1% savings rate. That means that folks are borrowing rather than savings, and the lower income folks are leading the way. Someone like Richie Fatcat will save ten cents of that extra dollar and spend maybe ninety cents. Junior, on the other hand, will not only spend the dollar right away, he'll borrow another dime and spend that, too!
Third, Richie Fatcat will get the dollar anyway. If there's one thing that rich folks know how to do, it's getting money away from the poor folks. Junior couldn't hold on to that dollar to save his life. He's buying booze with that dollar. Odds are that Richie Fatcat owns the liquor store or brewery. At least let Junior hold onto that dollar for a day or two before Richie gets it.
Fourth, Junior ain't spending that dollar on moving American jobs to China. That's what Richie Fatcat will do with it.
So, give Junior the tax break. He really needs it. For the really rich, like Richie Fatcat's uncle Rob R. Barron, how about a tax increase on all income over $10 million per year? Maybe 90%.
Yours in tax reform,
Stevie Joe Parker