Tuesday, October 16, 2012

A Simple Economic Argument – Lowering Taxes Increases Government Revenue


Written : Oct.16, 2012


My financially unsuccessful, left-wing radical father once recommended the book, How to Make Friends and Influence People, by Dale Carnegie. I once read, Rich Dad, Poor Dad by Robert Kiyosaki. Both men suggested that only a small percentage of people will succeed in becoming financially independent, or wealthy. The reason, I believe, is risk-taking. Neither my father nor I took many substantial risks with our money and neither of us became rich. That’s just the way it is. Even Melissa Harris-Perry, a liberal MSNBC host, recently admitted that more money in lower-income people’s hands means they will spend more. She unwittingly agreed with conservatives that when that happens, the economy grows. Poor people stay poor not because they are oppressed by the rich businessman, but because they don’t save their extra money, most don’t have a plan for success, they don’t become rich, they spend it all. Why can’t they accept it?

When you speak to some liberals they say that trickle-down economics never worked. They’ll tell you that they don’t want to return to the policies of Reagan and Bush, so they’re voting for President Obama. But, what are they trying to tell us? They mean that those policies didn’t make them any richer. They miss the point. No president’s agenda will accomplish that goal. They need to make it happen, themselves. If the president took all the money the wealthy have and gave it all to the poor, they’d stay poor.

The left also misunderstands the ‘widen the base’ argument on taxes. They should think a little bit deeper. For example, it’s easy to think that if you raise taxes, income to the government increases. The converse principle seems just as likely. If you lower taxes, revenue to the government - you would think - should decrease. In reality, though, it doesn’t work that way. Raising taxes places a burden on businesses, and they react by not hiring – or by firing workers. Dropping tax rates help businesses to decide to hire because they become less stressed. If tens or even hundreds of thousands of people start paying taxes, the government takes in more money. This concept is not difficult, and it’s only a tad harder to understand than the ‘up is higher, down is lower’ idea. However, for some reason, many people can’t, or refuse to see it. Perhaps we need to explain conservative principles to them from time to time…


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Keywords: Conservatism, Conservative blog, Mark A. Cohen, From The Left to the Right, President Obama, Mitt Romney, Dale Carnegie, Robert Kiyosaki, financial success, decreasing taxes helps

Keywords: "Conservatism", "Conservative blog", "Mark A. Cohen", "From The Left to the Right", “Red Eye”, “President Obama”, “Mitt Romney”, “Dale Carnegie”, “Robert Kiyosaki”, “financial success”, “decreasing taxes helps”

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