Why do high taxes create a stronger economy?
I used to run a small business -- a commercial film production company. Every time we took a dollar out as personal income, it instantly turned into 50 cents. If we didn't really need the money, that was an incentive to keep it in the company and to find ways to spend it that took it out of the taxable profit column but increased the value of the company. High taxes create an incentive to reinvest profits into long-term growth. With high taxes, the only way to retain the bulk of the wealth created by a business is by reinvesting it in the business -- in plants, equipment, staff, research and development, new products and all the rest. The higher taxes are (and from 1940 to 1964 the top rates were around 90 percent), the more this is true. This creates a bias toward long-term planning. If a business is planning for the long term, it wants a happy, stable work force. It becomes worthwhile to pay good wages and offer decent benefits. do try and think for a change sparky ! On Nov 17, 9:34 am, mark <[EMAIL PROTECTED]> wrote: > I need not post anything to counter this load of socialist crap. I > have common sense, murky. here I will explain. do try and keep up > won't ya? > let's say you have $10. the government takes $1 leaving you $9. $4 > goes to pay your bills, leaving you with how much? very good. $5 > with which you can spend on yourself. now let us say the government > takes $5 instead of $1, and you still need to pay your bills with the > $4. how much does that leave you now? right, $1 to spend on > yourself. so instead of putting $4 into the economy you can only put > in $1. so do tell me murky, how is it that only putting $1 into the > economy helps it more than putting $4 into it. come on think hard, I > want to hear this one. > > On Nov 17, 8:39 am, "mike [move on] 532" <[EMAIL PROTECTED]> > wrote: > > > > > really ? then post any prof you have that this article is untrue ! > > > On Nov 17, 6:26 am, mark <[EMAIL PROTECTED]> wrote: > > > > what a load of shit. > > > > On Nov 17, 6:17 am, "mike [move on] 532" <[EMAIL PROTECTED]> > > > wrote: > > > > > Why the Economy Grows Like Crazy Amid High > > > > Taxeshttp://www.alternet.org/workplace/106979/ > > > > The raw truth is that the economy has grown faster when taxes were > > > > higher, but how can we explain that phenomenon? The real- > > > > world effects of tax policy are counterintuitive. > > > > > They run exactly opposite the conventional wisdom. They defy what the > > > > Heritage Foundation calls common sense and what the American > > > > Enterprise Institute calls logic. > > > > > Reality laughs at the Laffer curve, calls Ronald Reagan wrong and > > > > says > > > > George W. Bush is a loon. > > > > > High marginal tax rates correlate with economic growth. > > > > > Examples include World War II and the Truman-Eisenhower years, when > > > > it > > > > was around 90 percent, and the Clinton years, when it was high > > > > relative to the preceding and following administrations. > > > > > Tax rate increases are followed by real economic growth. > > > > > Examples include Hoover in 1932, Roosevelt in 1936 and 1940, Bush the > > > > Elder in 1991 and Clinton in1993. > > > > > Moderate tax cuts are followed by a flat economy. > > > > > This is a generalization from one example: Johnson in 1964. > > > > > Large tax cuts are followed by a boom, a bubble and a crash. > > > > > 1929, 1987 and 2008 are examples. > > > > > These are covered in more detail in the first part of the article > > > > "Tax > > > > Cuts: The B.S. and the Facts." > > > > > Why do high taxes create a stronger economy? > > > > > I used to run a small business -- a commercial film production > > > > company. > > > > > Every time we took a dollar out as personal income, it instantly > > > > turned into 50 cents. > > > > > If we didn't really need the money, that was an incentive to keep it > > > > in the company and to find ways to spend it that took it out of the > > > > taxable profit column but increased the value of the company. > > > > > High taxes create an incentive to reinvest profits into long-term > > > > growth. > > > > > With high taxes, the only way to retain the bulk of the wealth > > > > created > > > > by a business is by reinvesting it in the business -- in plants, > > > > equipment, staff, research and development, new products and all the > > > > rest. > > > > > The higher taxes are (and from 1940 to 1964 the top rates were around > > > > 90 percent), the more this is true. > > > > > This creates a bias toward long-term planning. > > > > > If a business is planning for the long term, it wants a happy, stable > > > > work force. It becomes worthwhile to pay good wages and offer decent > > > > benefits. > > > > > Low taxes create an incentive for profit taking. > > > > > It is easy to confuse profitability with wealth creation. > > > > > They are not the same- Hide quoted text - > > > > - Show quoted text -- Hide quoted text - > > - Show quoted text - --~--~---------~--~----~------------~-------~--~----~ Thanks for being part of "PoliticalForum" at Google Groups. For options & help see http://groups.google.com/group/PoliticalForum * Visit our other community at http://www.PoliticalForum.com/ * It's active and moderated. Register and vote in our polls. * Read the latest breaking news, and more. -~----------~----~----~----~------~----~------~--~---
