A few posts back I asked Russ for his thoughts on beating the crisis which unfortunately he didn't reply to.
Hi Stamper. Somehow I missed your request for a plan to beat the "crisis." Here's a plan:
Leftists can't distinguish between tax rates and tax revenue, but history tells us that if you reduce tax rates you increase tax revenue. Bush, for instance, is accused of breaking the US federal fisc by reducing taxes. But once tax rates were reduced tax revenue increased substantially. Same thing was true with Reagan. As Casey said: "You could look it up." There are plenty of reasons for this, but you could look those up too, so I won't gild the lily.
The first part of my plan would be to reduce tax rates on everybody. Oh dear, the "wealthiest Americans" will benefit from that plan. Of course they will. They pay the vast majority of taxes. But the people who will benefit most will be small businesspeople. Most of those folks are sole proprietors or sub-S corporations and they pay taxes on their business income as if it were personal income, at tax rates much higher than corporate rates. Small business -- not the government or big business -- is what keeps the unemployment rate down, and more money in the hands of small businesspeople means more employment.
The second part of my plan would do away with death taxes. The people who'd benefit most from that change would be small businesses and farmers whose inheritors often have to sell their businesses or farms to pay the death tax. That kills a lot of businesses we can't afford to lose.
The third part of my plan would do away altogether with corporate taxes. Corporate profits are double taxed -- taxed once as corporate income and then taxed again as personal income. Besides being an incredible drag on the economy the whole idea of double taxation is outrageous.
There's more, including doing away with the unfunded mandates levied by over-regulation, but by now I think you can see some parallels between my plan and a certain candidate's plan. The whole idea would be, as John Kennedy said when he was campaigning: to "get American moving again." Raising taxes and increasing regulation isn't going to bring down the deficit. Only getting the economy back on track is going to do that.
But let me make a prediction:
Next year Angela Merkel will lose her election. Shortly after that the Greek economy will tank and the Greeks will have to dump the Euro and monetize their debt with a hugely inflated drachma. Not too long after that the Euro will go down altogether along with the socialist European economy. The US won't escape the result. So, everybody batten down the hatches. We're in for a wild ride.
