Understanding Economics And Taxation

It never ceases to amaze my how blind or how ignorant the liberal Dems in Congress and a number of state legislatures can be when it comes economics and taxation.

Somehow they believe that by pulling money out of the economy, for whatever reason, such an action helps boost the economy. That's like saying that if someone steals your hard earned money it will somehow increase your ability to purchase goods and services. To just about anybody but those Dems, that statement makes no sense.

That doesn't stop them from trying to convince that the above statement is true. Some are even trying a little bait and switch, saying that they're cutting taxes. But at the same time they're hiking them someplace else, usually to the detriment of the very people they say they are trying to help.

A perfect example is Charles Rangel (D – NY), chairman of the House Ways And Means Committee, has told us he's working to do away with the dreaded Alternative Minimum Tax, or AMT, a tax put in to place by Congressional Democrats back in 1969 to make sure that the government got its 'fair share' from the wealthy. But with inflation and no provisions for indexing the AMT to inflation, the AMT started hitting the middle class and hitting them hard. So it has outlived its usefulness and should be repealed.

But what Charles Rangel isn't telling you is that he has far more onerous taxes he wants to levy on you that will make the AMT look like petty larceny.

Rep. Charles Rangel of New York, chairman of the tax-writing House Ways and Means Committee, last week introduced an estimated $3.5 trillion tax increase that would raise the capital gains tax rate from to 19.6% from 15% and places a surtax of as much as 4.6% on people making more than $150,000 a year. Mr. Rangel applies it not to current taxable income but to adjusted gross income, thus phasing down itemized deductions such as charitable contributions, home mortgage deductions, and state and local tax deductions. Together with the end of the Bush tax cuts, Mr. Rangel's plan would increase the top income tax rate to 44% from 35% for individuals, small-business owners and farmers, who make up about three-fourths of taxpayers in the highest bracket.

While raising taxes on individuals, the Rangel bill would reduce corporate tax rates to 30.5% from 35% and eliminate the alternative minimum tax. That would be "paid for" by increasing taxes on hedge funds and buyout firms by about $48 billion.

So it appears that Mr. Rangel wants to raise taxes on individuals, the people that actually drive the economy, making sure that the economy will slow, if not fall into recession. This will have the effect of reducing tax revenues that the Democrats want so badly to spend in order to bring about their version of utopia, which is in reality a dystopia for everyone else.

Sucking $3.5 trillion (that's trillion with a 't') out of the economy will do nothing more than put some of the very people that the Democrats want to 'help' out of work. Of course, that means all of the new social programs the Dems say we need will be there to 'help' the very same people they put out of work.

And maybe that's exactly what they want.

No comments:

Post a Comment

Comments are welcome. However personal attacks, legally actionable accusations,or threats made to post authors or those commenting upon posts will get those committing such acts banned from commenting.