Political News NOW!

And if Congress can not find a way to effectively reduce spending (planned), in fact, the U.S. $ 1 trillion in revenues from these tax increases is absolutely necessary to avoid a spiral of deficit control and sending interest rates sky high. Not all of these taxes will come to Fat Cats alonefor example, people recognize the gains in average income before retirement life IRSbut rich air is fair to say that most Americans every day just to feel indirect effects. Under his proposed budget, banks have paid billions of financial responsibility as a fiscal crisis, families earning more than $ 250,000 to do timely Bush tax cuts, raise taxes on dividends and capital gains would be heavier. So far, however, HES showed no sign of that, however, seeking with the comfort you feel when the left wing not to wet the rich. With a record deficit, the ambitious spending plans of their own, and no concrete proposals (by Democrats or Republicans) for a sustainable reduction of expenditure, the Chairman prepared a plan to increase the tax on the first major in nearly 15 years .

Almost all taxes are, by definition, have distortionary effects. Despite its possible that some of these new taxes may have a meaning in isolation, one-sided focus on making the rich pay demonstrates extraordinary vision and creates an extreme hazard. Raising taxes on capital gains, for example, discourages investment (and, as the tax on capital gains arent indexed to inflation, is fundamentally unjust to run), while the higher marginal rates of taxes on stock dividends encourages cash rich company to spend money on long-shot projects rather than return to shareholders. After a certain point, higher taxes for the rich in any way can not be counter-productive: people with almost unlimited resources, you can always move elsewhere to avoid tax. States like California and New Jersey, which has sought to respond to the crisis and recently revealed disappointing results because of the deep recession and because the rich went off to reduce local taxes. In some casessin taxes on alcohol and distortions May tobaccothese are welcome, but in general, have huge negative consequences for those who value freedom of choice and free markets.

Ideally, the spending cuts are in order. The point, of course, is that the president should immediately draw up plans to seize more than the salaries of teachers, middle managers, and bus drivers, but that attention to tax the rich is just a stupid way of try to increase revenue. But whether Congress should raise taxes, you should consider increasing the middle class.

Related Stories