Day by Day

Thursday, November 17, 2005

DW's post reminded me....

In talking about tax laws, what we have to remember is that at this point in history, we're not dealing with theory anymore. We're dealing with learned lessons and true examples.

Communism fails. That's not a theory, that's a fact, and we know it's a fact because every communist economy has failed. Not just kinda failed, but miserably failed to support the country who tried it. The USSR is dead and gone, folks. Cuba is a stinking rathole. North Korea can't even produce enough food to feed it's citizens. China is long past the communist economy stage, even if the rest of the government is as commie as can be. China couldn't survive with a communist economy.

Socialism lowers the quality of life for people in a country. The "poor" in America have more material possessions and living space than the "middle class" in Europe. A socialist healthcare system drives people away, rather than actually helping them. Remember fwance's 10,000 dead a few summers ago?

Can anyone imagine 10,000 people dying off in a heatwave in America? Hell, we've lost one-fifth of that number in a frigging war, in a place where temps can get up to 140 degrees!

High taxes stifle economic growth. Again, this is not a theory, this is a fact. Look at every period of slow economic growth in America after the Great Depression. It's coupled with high tax rates. The opposite of that, low taxes spurring economic growth is also true. The last three big tax cuts were made by JFK, Reagan, and GW Bush. EVERY TIME, once tax rates fell economic growth surged, resulting in increased tax revenues. This isn't theory. This. Is. Fact.

And the article that made me write this post?

Flat taxes work.

In 1994 under Mart Laar Estonia introduced a flat tax of 26 percent. The country prospered with rising revenues and economic growth year upon year. Now Estonia feels confident enough to approve a lower rate of 20 percent.

DW is right, an income tax is a punishment for effort. A progressive tax rate, (higher income earners pay more taxes) is the second plank of the fucking Communist Manifesto. A simple flat tax, where everybody pays the same amount, would skyrocket our economy right off this planet. Even better, make it a flat SALES tax, and nobody could touch us. I wouldn't quite be making love to my wife on top of $100 bills, but our economy would be going so damn fast that opportunities to make money would be everywhere. Why's that, you say?

Because a flat sales tax would not touch investments. A flat sales tax wouldn't punish people for making money. When I was living in Seattle, I was putting in assloads of overtime at my job. At one point, I worked 70-80 hours a week, trying to get some money to put into a savings account. When I got my check, do you know how much more money I had?

A few hundred bucks.


One word: Taxes. With all the extra income I made, it pushed me up into the next tax bracket, and a huge chunk of that money was taken by Uncle Sam. Now, is that an incentive to work overtime? Does that make me want to put all those hours in?

Hell no.

Now, lets say that America had a 20% sales tax instead of an income tax. I keep ALL the money I make. All those overtime hours would mean more than $1500 extra in my paycheck. $500 goes into my savings account (which the bank uses for it's own purposes, like handing out loans and whatnot). $500 goes into a mutual fund. And $500 goes towards good cigars, fine scotch, and a dinner out for me and a friend. What do I get taxed on?

I get taxed on the cigars, the scotch, and the dinner out. At this point the Leftists are jumping up and down screeching "SEE! SEE! LOWER TAX REVENUES! EEEEEEEEEEK!" But that's because leftists are, by nature, dumb fucking morons. My money doesn't just sit in my savings account. The bank uses it. That's why there are checking accounts and savings accounts. Savings accounts have a higher rate of interest, because the bank is USING that money to conduct it's own business. Your bank may also offer CD's and retirement accounts. Did you ever wonder why there was a monetary penalty for early withdrawal of those funds? It's because once you put your money into those types of accounts, the bank uses it. THAT is why you're getting a higher rate of interest. To put it rather simply, YOU are giving the bank a loan when you open up a retirement account or a CD. The interest you receive in return is just like the interest you would pay a bank if you got a loan from them.

And what does the bank loan your money out for?

Opening businesses, perhaps. Home loans. Car loans. In short, rather than your money just sitting in a vault somewhere, it is being used to drive the economy forward. And your $100 dollar a month IRA which you might think is chicken feed is being used so that someone can buy a $500,000 home.

Now, factor in that 20% flat rate sales tax. What's 20% of $500,000?

A hell of a lot more than I would have paid in taxes under an income tax.

Economics is NOT a zero-sum game. Wealth is fluid, flexible, able to shrink and grow. If I buy $100 worth of stock, that doesn't remain fixed. It can grow into $150 worth of the very same stock, or it can shrink to $50 worth of stock. That very simple example is what the leftists and statists just don't seem to understand. And thus they play their class warfare games and attempt to tax the shit out of everyone.

In any case, everything I've written here isn't a theory, it's a fact, albeit not stated in the classiest or wisest prose. I never claimed to be a teacher or an economist, but the fact that a simple soldier like me can see what the Dimocrats cannot should give you pause when you hear them discussing ANYTHING about the economy.

I'll probably come back and re-word this later, when I've woken up.

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