It seems like all the presidential candidates are getting on the bandwagon. No matter what program we want to fund or just to reduce the deficit, all we have to do is close the tax loopholes. While this seems like a popular idea, maybe we should think about it for just a minute.
Some loopholes are undoubtedly created as political favors. I'll contribute $1M to your campaign if you give my product some kind of tax advantage. Generally, I would be happy to see these loopholes disappear up. I think the electoral process would be better for it. On the other hand, many (most?) loopholes are established to encourage a particular behavior. The most common one is the home mortgage tax deduction, which encourages home ownership. Can we expect to eliminate all the loopholes and not expect the behavior of the entities benefiting from the loopholes to change? Will their behavior change in a direction that is more costly to the economy in general and the middle class in particular? I don't think anyone knows, but before we go around cavalierly hacking away at loopholes, we damn sure better understand the consequences.
You just can't expect to take money from one segment of the population and give it to another without expecting those that lose their money to change their behavior as a result.
Showing posts with label rich. Show all posts
Showing posts with label rich. Show all posts
Sunday, November 15, 2015
Saturday, April 2, 2011
Tax the Rich?????
We hear this a lot these days all the way from the local level up to the federal. It's a popular outcry, but is that really the answer to our problems?
Just what does anyone think the "rich" do with their money. Other than maybe a few very eccentric ones, the rich do not stuff their mattresses with $100 bills. They buy houses and cars, both of which employ people in construction, manufacturing, real estate and other services. Some might have house keepers and grounds keepers; again, employing people (hopefully not illegal immigrants). Beyond that, they INVEST their money. They buy corporate bonds, loaning money to companies so they can build factories, buy materials and hire people. They buy municipal bonds, loaning money to municipalities so they can improve their infrastructure and thus make our towns more enjoyable to live in and providing jobs. They buy stock in companies, providing a source of revenue to enable growth in production, profits and employment. Some of the money goes in the local bank where it is loaned out so that others can buy houses and cars. Of course, when people buy houses and cars, someone has to build and maintain them... more jobs. And, many of the "rich" give large amounts of money to their favorite charitable organizations.
The next time you want to jump on the band wagon and bash the "rich" or "business", think of where the money that runs a successful economy comes from. The answer isn't taxes!! Taxes are only possible because an economy is strong, they cannot make it strong.
Just what does anyone think the "rich" do with their money. Other than maybe a few very eccentric ones, the rich do not stuff their mattresses with $100 bills. They buy houses and cars, both of which employ people in construction, manufacturing, real estate and other services. Some might have house keepers and grounds keepers; again, employing people (hopefully not illegal immigrants). Beyond that, they INVEST their money. They buy corporate bonds, loaning money to companies so they can build factories, buy materials and hire people. They buy municipal bonds, loaning money to municipalities so they can improve their infrastructure and thus make our towns more enjoyable to live in and providing jobs. They buy stock in companies, providing a source of revenue to enable growth in production, profits and employment. Some of the money goes in the local bank where it is loaned out so that others can buy houses and cars. Of course, when people buy houses and cars, someone has to build and maintain them... more jobs. And, many of the "rich" give large amounts of money to their favorite charitable organizations.
The next time you want to jump on the band wagon and bash the "rich" or "business", think of where the money that runs a successful economy comes from. The answer isn't taxes!! Taxes are only possible because an economy is strong, they cannot make it strong.
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