There’s no surefire way to keep from making mistakes. One way to help ensure that you make fewer of them is to understand why you made the mistake in the first place. At the risk of sounding a bit too cliché, history repeats itself—both the bad and the good.
We’re at a crucial crossroad as a country. I’m not just talking about the upcoming mid-term elections. I’m talking about a decision that will have huge repercussions no matter who is in power come January. The Bush tax cuts are set to expire at the end of this year. For some, that moment couldn’t come too soon. They are the ones who either are ignorant of history or who refuse to learn from it. History teaches us that every time we lower taxes we see revenue to the Treasury increase. That’s counterintuitive to some but it’s simply a matter of logic.
Lowering taxes means more money in the private sector. More money in the private sector means more money being spent. More money being spent means more goods and services being produced, thus more jobs and better paying jobs, which means more income taxes being paid.
Of all the people in this country who should fully understand that, Treasury Secretary Timothy Geithner should be acutely aware of how this works. Apparently he either is not aware or still so clings to his progressive beliefs that he’s willing to sacrifice the country for his liberal ideology.
Geithner is a supporter of President Obama’s plan to keep some of the tax cuts for the middle class but sock it to the rich by letting their tax cuts expire. It sounds very populistic of them, but it makes no sense, logically. If they believe that tax cuts for the middle class will help stimulate the economy, then why don’t they believe the same for the rich?
What they’re doing is playing class warfare. They know there are more middle class voters than rich so they’re trying to appear as if they feel the pain of the middle class by making a sacrifice of the rich. It’s a cute political trick but it’s dangerous to the long-term economic stability of this country.
Besides, the top 5 percent of wage-earners—according to the IRS—pay nearly 60 percent of the income tax. Sounds like the rich are already paying their fair share and then some.
At least a couple of Democrats already have the foresight to see what’s coming down the pike if we raise taxes on anyone. Democrat Senators Evan Bayh and Kent Conrad have questioned the wisdom of raising taxes in the midst of this fragile economy. If raising taxes in the midst of a weak economy will only make the economy weaker, it seems that raising taxes at any stage would be unwise.
The problem for the Republicans is even if they do manage to take control of either chamber of the legislative branch, we’re riding for a fall if they don’t have the votes to keep the tax cuts. If they do eventually wrestle some of the power away from the Democrats and the economy dips back into a recession, then they will be blamed and Obama could find himself re-elected in 2012. If there is no chance of repealing the tax increases the Democrats seem dead set on enacting, the Republicans, ironically, would be better off losing in November and letting the Democrats take the fall for what surely will be a weak economy for the foreseeable future.
However, if the Bush tax cuts are made permanent, we all win.
