This week certainly flew by.
We’re gearing up for harvest around here. I have a love/hate relationship with harvest time. I love the cool, sweatshirt weather. I love riding in the combine or grain cart with David. I love the warm, Indian summer afternoons. I love seeing the cliched full harvest moon. Frost on pumpkins. Gourds and Indian corn from my garden. Mums in full bloom. Love all that.
But of course, I miss seeing my husband as often. And the days, though shorter, seem a lot longer after spending them with two rambunctious kiddies without a break. This harvest, I plan on visiting my parents more often, just to break things up. It will give said husband the excuse to eat some good meals at his mama’s, I figure.
Mom, speaking of economics, I was perusing some papers last night, and came across something that Someone Near and Dear to my Heart wrote awhile back (who shall also remain anonymous.)
I have reproduced it here for the edification of my readers (written May 2008):
Here is a link with a great article to read explaining the Laffer Curve. http://www.heritage.org/Research/Taxes/bg1765.cfm
The Laffer curve shows that tax cuts only raise government revenues instead of decreasing them as it would first appear. Pay special attention to the section on capital gains tax, which will rise if we have a democratic president and congress. If this happens many (including myself) believe that the stock market will instantly fall 15-20%. This is when we will see a real recession, not like the little burp we are having now (the economy actually grew .6% in the first quarter of 2008), which has been latched onto by the media for the past 2 months.
Why would stock market fall? No one wants to pay taxes. So investors who have seen their investments grow would rather take the profit and pay a small tax rate before the rate increase takes effect. Every American with a 401k or IRA would feel the pain in a real way then. Investors would then be more likely to invest in virtually risk-free and more importantly tax-free municipal bonds instead of taking a chance in the stock market. Investors would rather get a guaranteed smaller return untaxed than take a chance on a big return, knowing if it only returns a modest amount the government is going to take more of it anyway.
I want to point out that I understand the need for taxation and willingly pay my fair share. The government has many legitimate expenses, such as arming a military, providing infrastructure, keeping a criminal justice system in place, and helping those who truly cannot provide for themselves.
What leads to higher government revenue, as pointed out in the above link is not higher taxes (especially on the wealthy) but a prosperous free market economy left alone by the government. Look at history in the past century the three biggest boom decades have all followed major tax cuts. Harding-Coolidge cuts-roaring 20’s, JFK cuts-1960s, Regan cuts-1980s and 90s. Consequently government revenues also rose during these times because people were not afraid to take the chance in our economy because there wasn’t a great penalty for doing so. Henceforth incomes rose, unemployment fell, and people made more so they spent more and then others made more, which is exactly how capitalism works. And because so many were making more the smaller percentage of income taxed turned into a larger government revenue.
Tax the rich, cut taxes for the poor. This is a simple campaign promise made by many politicans. I admit it sounds good, on the surface. But the truth is that the poor don’t pay taxes. How can one lessen a burden that doesn’t exist? And raisng taxes on the wealthy only stifles the economy as explained earlier. The middle and upper class are the ones who invest in our economy with their after tax dollars. This leads to innovation, reasearch, progress, companies growing, job being created, higher incomes, greater growth in the average income earners retirement and savings accounts, and countless other benefits.
One of the most refreshing statements I have ever heard made by a politician.
“Perhaps one of the most important accomplishments of my administration has been minding by own business.” -Calvin Coolidge
Required Reading: http://online.wsj.com/article/SB122126282034130461.html?mod=opinion_main_commentaries If You Like Michigan’s Economy, You’ll Love Obama’s