The refusal of Republican politicians to acknowledge reality never ceases to amaze me. We are facing deficits growing at an unprecedented rate, and what do they propose to do about it? More tax cuts for the wealthy.
I could almost acknowledge the argument that investors are scared and they need extra incentive to return to the market. But what happened to supply and demand? Prices are low. Maybe, just maybe, what we need is structural reforms to keep the unscrupulous executives in check to restore investor confidence.
But the Repubs aren't even making this argument. It's the same old "put more money in the hands of the already-wealthy and they will stimulate the economy." Bull. When we tried to do it under Reagan, it didn't spark the economy and it lead to bigger deficits. Initially, taxes got shifted to the state level and then federal taxes had to be raised. So we ended up worse than we were before.
When rich people get more money, they usually fail to spend most of it. Why buy a third yacht when we hardly use the other two? So they invest it, which helps the markets, but not the economy as a whole and not nearly as much as the faithful insist it does. Company XYZ can get a bigger loan, so what? How are they going to pay it back if they don't have any new customers to buy whatever product or service they create? (Assuming they create a product or a service . . . .)
No, I am convinced that exactly the opposite is true. The very poorest wage earners should receive earned income credits. The poor should pay zero taxes and the lower middle class should pay a very, very low tax rate. This puts more money in their hands and creates more consumers, which benefits business, who can hire more workers, which creates more consumers . . . . Call it demand-side economics. The lost government revenues should be made up by the rich as a big, wet, sloppy "thank you" for getting to live in the land of opportunity.
This is essentially what Clinton did with his first budget. He increased taxes on the richest Americans and he simultaneously increased the earned income credit for the very poor. I would say the results speak for themselves. It doesn't fit the conservative ideology, so they conveniently ignore it. But that doesn't make it any less true.
The amazing thing is, that under Clinton, the rich took home more net income after taxes than they did at the lower rates. We taxed them more and their wealth actually increased. You would think that greed alone might make them acknowledge this. But their irrational devotion to Reaganism blinds them to the truth. Just another reason all Republicans should be defeated at every opportunity.
8:33:44 AM 
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