Tax Cuts: Friend or Foe?
It’s been rather frustrating lately talking with people about Romney’s ideas on cutting taxes. So many people view tax cuts as bad, not because they really know if they are, but because Bush implemented tax cuts during his presidency and they don’t like Bush. The media blames the high deficits on the tax cuts and proposes that if the rich will pay a little more, the deficit problem will go away. We should base our fiscal ideals on whether the financial idea being put forth is actually a solution to our current economic problems, not on whether or not we like the guy who is presenting it.
People conclude tax cuts don’t work, because the nation’s deficit increased when Bush created tax cuts. This was not because of a drop in revenue to the U.S. Government. Quite the contrary, note the high amounts of revenue that came into the government from the Reagan and Bush tax cuts. The deficits increased because spending also increased when Bush cut taxes. Just like in a personal budget, if a person is carrying revolving credit card debt and obtains a higher paying job, they can pay down that debt with the additional income they are earning. Unless, of course, they increase their spending, which then only creates more debt for them. Cutting taxes and increasing spending are not great bedfellows. Spending must be decreased at the same time taxes are decreased. And, as Romney has stated, regulations must be curtailed on businesses and corporate taxes brought to a competitive rate to bring corporations back to America.
So, how does cutting taxes–which is one way the government makes money to fund programs–actually increase revenue? Seems a little backwards to people who listen to the mainstream media. Liberals tend to ignore the most basic economic principal, “People respond to incentives.” The libs fail to understand that lowering tax rates creates a motivation for work and productivity. When my husband was growing up in the Carter years, he knew neighbors who would deliberately turn down chances to work overtime, just because it would raise their tax bracket and actually force them to receive less take home pay. The company certainly needed their work and had the business to offer the overtime. But the high tax rates made the benefit of leisure more than the cost of working.
When businesses pay more out in taxes, they can’t afford to increase their product lines, pay higher wages, or hire more employees. Taxes aren’t just about money paid to the government. Taxes affect the overall function of a business. More taxes paid to the government mean less money going back into the company and to employees. To make up for the increased money going to the government in the form of taxes, companies are forced to raise their prices and cut jobs. This invariably puts the tax increase ultimately on the American people because corporations do not pay taxes; they merely pass the tax expense to their customers through increased prices on products. Regulations also cost money, which just adds to limiting how profitable a company can really be.
A profitable company means a profitable America. I don’t understand where, why, or when “profits” became evil. I also don’t understand why the government can literally waste billions of dollars and it be accepted as normal behavior that is not evil. If you work hard and receive a pay raise, isn’t that a profit to you? Don’t you want to be financially rewarded for your hard work and dedication to the company you work for? If so, I think corporations can enjoy the fruits of their hard work, too.
Corporations don’t squander away their profits, though. They put it in research and development for new products to keep themselves viable. New products means increased production and increased production means more jobs. If corporations build additional offices or plants in new locations, that also increases job growth and spurs on other companies.
For people who have stated Romney hasn’t shared specifics on how he would create jobs, they either haven’t been doing their research or they listen way too much to the mainstream media. Romney has outlined his jobs plan in an eight page document, The Romney Program for Economic Recovery, Growth, and Jobs, which can be found on his website, www.mittromney.com/jobsplan. As you read through his plan, it is easy to identify Romney’s fiscal platform. One thing is clear; he isn’t just looking at a short run recovery. His plan also includes long run growth and financial stability. His plan projects the “creation of an additional 7 million net new jobs over the next decade…” (emphasis mine). These jobs are not merely entry level, they are substantial jobs; jobs a college graduate can go into.
With all of the media hype supporting Obama, one thing is clear, Romney has a plan and Obama is not the man we need as President. If you have watched the debates, Romney has either shared his ideas or corrected Obama on his “facts.” Obama has only talked about Romney. What is Obama’s plan? Will he change course knowing he is going in the wrong direction? Why take another chance on Obama? He has proven his only plan is to financially ruin the United States. A vote for Romney is a vote for true economic recovery and a chance at a prosperous America once again!