|Posted by Matthew Jordan on July 25, 2011 at 9:14 AM|
Amidst our countries debt ceiling crisis, there have been many lies given to the public. Those who are uneducated in the topic will feel obligated to trust the President since you would think he knows what he is saying. Truth is, he probably understands how our economy works, but to get what he wants he and the democrats partake in what House Speaker Boehner calls “sniping politics”.
The biggest idea that they are dragging over our head is that the only way that the government can raise revenues in these rough times is by raising taxes. This is simply wrong, and would most likely decrease revenue. One may ask if the president is so headstrong about this, why he would not believe it. The fact is he said a year ago that he would not raise taxes because that is the last thing you want to do in a struggling economy. Given that the economy is in the same state if not worse, his statement should still stand.
So what should the government do to increase taxes? Ideally the best route to receiving the most fair and balanced tax system that brought in the most revenue would be a consumption tax. In a consumption tax, people pay taxes on what they buy and not what they make. This helps us get rid of the near fifty percent of Americans that do not pay taxes. While this would be a huge leap, and most unlikely in the near future, a flat tax with lowered rates is a better current solution.
The flat tax with lowered tax rates does two things. First off it simplifies taxes so that if you are in a certain tax bracket, you pay that amount, no deductions or credits. This makes things very simple for all involved making it easier for everyone to pay taxes, and cutting out loopholes. The second thing this tax does is lower rates for everyone. Lowering rates is important because it gives more money back to the people that earned it. When people have more money they will spend more. More demand in the market creates more supply, which in turn creates more jobs to produce the supply. With more people working and simpler tax system, there is no reason that the government should not bring in more revenue.
So why hurt the American people with higher taxes, especially in a low economy. There is most likely an agenda behind all of this, and it probably goes back to Obama’s idea of spreading the wealth around. While he may not be taking in more revenues, he would be taking more from the rich to fund entitlement programs to others. In all honesty, many entitlements should be cut to, but that is for another article.