|A typical myth used as a scare tactic.|
This one was created to dissuade voters
from supporting the Bush tax cuts
in 2001. Which, by the way,
increased government revenue.
Why not. For one thing, why can’t the government do with less? The entire premise of a tax cut is that the government can go with less. If you have less money, then you cut waste. Where is there waste in government? There’s lots of waste in government. Cut the frickin waste. If a job isn’t needed, cut it. If a department isn’t needed. Cut it.
Reagan cut taxes. Reagan also increased spending on national defense to win the cold war. God forbid. The tax cut inspired an economic boom. By the end of the 1980s, the national debt was sky high. Democrats blamed the Reagan tax cuts. They failed to blame their reneging on their promise to cut spending.
Still, even without spending cuts, tax cuts pay for themselves. With more money in their pockets, people have more money to spend. This boosts the economy. Able to keep more money, businesses, and industries have more money to play with. They can hire more workers. They can open new plants and hire even more workers. They can offer higher wages to keep their best workers. They can offer higher wages to draw in the best workers.
This creates more jobs. The end result is more taxpayers. More taxpayers equals more revenue.
Think of it this way. When you want to buy clothes, where do you go? What stores do you shop at? You shop at the store with the lowest prices. You look for bargains. You look for sales. You try to buy the lowest priced items. You go to the store with the lowest prices. You go to Walmart. You go to Amazon if they have better prices.
When you're shopping, you try to get the best deals. This way your money goes farther. You can buy more with it. You can get more stuff. Or you can keep more of your savings if you want. You can save. You can get out of debt. There are so many options.
Taxes are the same as store prices.
When you go to a yard sale what do you do? You see something for $20, you say, “Would you take $15?” More often than not they accept your lower price. If the product is 50 cents, you just pay the 50 cents. This is because it’s not worth your time to bargain for such a low price.
Taxes are the same way. If they are high, you find ways to get around paying them. It’s worth your time to bargain. When they are low, you just pay them.
The end result is the government makes more money off tax cuts than with tax hikes. When taxes are low the government makes more money. You have more taxpayers. You have fewer people trying to find ways to hide their money and not pay high taxes. You have more money coming into the government.
I can give you three real-life examples. You have the Warren G. Harding/ Calvin Coolidge tax cuts of the 1920s. You have the Kennedy tax cuts in the 1960s. And you have the Reagan tax cuts in the 1980s. They all resulted in an economic boom. They all nearly doubled the national income over the ensuing ten years.
There you go. I just put an end to the myth that tax cuts cost too much. I put an end to the myth that you have to find a way to pay for tax cuts. I just put an end to the myth you can't afford tax cuts.