Of course taxes are necessary, and infrastructure is important. However, if you’re a business owner, do you want to pay a 15% tax rate or a 40% tax rate? Which tax rate would allow you more money to invest, continue business growth, and so on? It’s true that taxes were higher during the Clinton years and the economy boomed, but the dot com boom was a one time deal. We can’t very well invent the internet again can we? Infrastructure and other government activities make up a small portion of the economic output of our society. If this demand side economic idea worked, we’d have an economic boom on our hands. The question is, when is Obamanomics going to work for Americans, and not for Solyndra executives who ran a company into the ground, and still walked away with millions of taxpayer dollars? Obviously there is no full proof plan. If the Federal Reserve is doing something stupid, like printing too much money and deliberately blowing up a bubble, even a good tax policy wouldn’t save you. Remember that Paul Krugman said “We have to create a housing bubble” to end the 2001 recession. So maybe liberal economics does work, but certainly not for long.
Obama’s economic policies are identical to Bush’s, except that Obama increased the size of the tax cuts and then cut some social programs to offset almost half the loss in revenue.
Government already made up more than 20% of the economy — one out of every five dollars — before Bush went on his mad spending spree with the wars, a new cabinet level position and an enormous new government agency.
We haven’t tried “Demand Side” economics since Reagan, when his tax cuts were more than matched with spending increases (putting people to work). Unfortunately, because of those tax cuts the growth in the economy was never enough to cover the loss in revenue, and the debt exploded…
You’re just plain wrong when you claim that demand-side economics has been given any opportunity at all in the last decade.
70% of all businesses in America have ZERO employees. Source: The U.S. Census Bureau.
If you’re in the 25% tax bracket you have to earn $40 thousand to buy a $30 thousand car. If you own a corporation which pays 35% tax, on the other hand, you only have to earn $30 thousand to buy a $30 thousand car — you call it an “Expense,” a business expense. It’s not taxed. Instead of costing you an extra ten-points off your income, that “Higher Rate” actually saved you $7,500 in taxes!
Major corporations? Please. They’re giant piggy banks for the people who control them. The CEO of GM is paid the same as 14 CEOs of Toyota. Wall Street is not practicing Capitalism, it’s practicing Feudalism. “Executive Compensation” is not even performance driven, let alone market driven. There isn’t a major corporation in America that couldn’t significantly cut executive “Compensation” without any registrable effects on demand for the positions.
Executives take the money because there is literally nothing stopping them. The boards — their boards — approve it, and the cash is gone.
The fact is, if we raised taxes, put people back to work and created new demand for products and services, companies would invest in bringing new products in services to the market. If they didn’t have the money they would borrow it.
Again, we’ve been trying it your way since 2001 — starting with Bush AND CONTINUING under Obama. Your way failed miserably. It’s time to change course.