President Barack Obama wants us to believe that the U.S. economy can be taxed into prosperity. This is the same logic that prosperity/wealth can be created by taking on more debt. (How will has that worked out for Americans? Our national debt is $15.7 trillion, which is larger than our GDP of $15.1 trillion.)
Americans need to take a refresher course on the 1920s, 1960s, 1980s and even the 1990s, when government spending and taxes were cut and employment and incomes grew rapidly. (Take notice of the fact that the 1930s are not part of the refresher course on economic history. Why? Because that was the start of the prosperity/wealth by debt paradigm under Roosevelt. Well, it really started under Hoover, but Roosevelt took it to the next level. It didn't work in the 1930s, just as it will not work today. Also, it is just not about cutting taxes; it is also about cutting government spending. See, this is the the conversation that we must have with the American people in regard to the services that they want with their tax dollars of $2.3 trillion to provide. That is, the government has extracted $2.3 trillion from us but spend $3.6 trillion. So, we borrow $1.3 trillion, which is added to the national debt. No, this is not sustainable. We only have $2.3 trillion. However, I don't see any of our leaders willing to have this discussion with the American people.)
Ok, back to my topic of "Taxes Do Matter." If one wants to see evidence of how taxes do matter, one can look to what's happening in our 50 states. In a recent study entitled, "Rich States, Poor States," prepared for the American Legislative Exchange Council by Laffer and Moore, it compared the economic performance of states with no income tax to that of states with high tax rates. Some of the findings are as follows: (1) Every year for the past 40, states without income taxes had faster output growth than states with the highest income taxes, (2) Job growth was also much higher in the zero-tax states, and (3) States with the nine highest income tax rates had no net job growth at all, and seven of those nine managed to lose jobs. (Illinois, which is one of those dubious nine states, has lost one resident every 10 minutes since hiking tax rates in January 2011.)
Americans need to take a refresher course on the 1920s, 1960s, 1980s and even the 1990s, when government spending and taxes were cut and employment and incomes grew rapidly. (Take notice of the fact that the 1930s are not part of the refresher course on economic history. Why? Because that was the start of the prosperity/wealth by debt paradigm under Roosevelt. Well, it really started under Hoover, but Roosevelt took it to the next level. It didn't work in the 1930s, just as it will not work today. Also, it is just not about cutting taxes; it is also about cutting government spending. See, this is the the conversation that we must have with the American people in regard to the services that they want with their tax dollars of $2.3 trillion to provide. That is, the government has extracted $2.3 trillion from us but spend $3.6 trillion. So, we borrow $1.3 trillion, which is added to the national debt. No, this is not sustainable. We only have $2.3 trillion. However, I don't see any of our leaders willing to have this discussion with the American people.)
Ok, back to my topic of "Taxes Do Matter." If one wants to see evidence of how taxes do matter, one can look to what's happening in our 50 states. In a recent study entitled, "Rich States, Poor States," prepared for the American Legislative Exchange Council by Laffer and Moore, it compared the economic performance of states with no income tax to that of states with high tax rates. Some of the findings are as follows: (1) Every year for the past 40, states without income taxes had faster output growth than states with the highest income taxes, (2) Job growth was also much higher in the zero-tax states, and (3) States with the nine highest income tax rates had no net job growth at all, and seven of those nine managed to lose jobs. (Illinois, which is one of those dubious nine states, has lost one resident every 10 minutes since hiking tax rates in January 2011.)
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