More Taxation is Not the Answer
Here is a letter to the Chicago Sun-Times:
In the wake of the recently passed debt deal, the Chicago Sun-Times asserts, “President Obama’s job is to convince the nation that more tax revenue — not just more spending cuts — must be a part of the two-stage deal” (Obama must find a way to boost U.S. revenue, August 2). However, income taxes aren’t the solution, they are the problem.
Simply raising marginal tax rates will accomplish nothing, since tax revenue as a share of GDP is historically 18-20% regardless. Our lackluster revenue and economic output is due to unemployment, and the best way to foster job growth is by eliminating all income taxes on individuals and businesses. If the US taxes consumption rather than income, a whole new jobs boom will begin instantaneously.
Absent an income tax, businesses will exist in an environment of certainty without the need to seek out loopholes and foreign labor markets. Moreover, corporations will flock to the US, firm in the knowledge that this is the best country to start-up and grow business. As industries realize an influx of new competitors to innovate, countless jobs will be created in the process. Certainty for business translates to stability for individuals and a prosperous society for all.
Furthermore, individuals gaining the freedom to increase their consumption, investment, and savings will result in an additional uptick in economic output. Since the wealthy account for the largest block of consumption, they will indeed pay their “fair share” of taxes. Eliminating the income tax and replacing it with a consumption tax will also remove unfair advantages to politically well-connected individuals, corporations, and special interests – providing a level playing field for all market participants. How does that translate to a “kick in the gut to the middle class”?
Craig D. Schlesinger