Plenty of cults exist - every cult has its 'religious dogma', its idols, its 'prophets', its 'science', its 'proof' and its intolerant liturgy of demands. Cults everywhere: Corona, 'The Science' or Scientism, Islam, the State, the cult of Gender Fascism, Marxism, Darwin and Evolution, Globaloneywarming, Changing Climate, Abortion...
Tempus Fugit Memento Mori - Time Flies Remember Death
Tax cuts! Oh you can hear the moans now. Only for the rich the Marxists will scream. The socialists wail that such cuts are immoral and against ‘national values’. Media types will somberly intone that the destruction of the welfare state is not far off. TV documentaries will show old people eating dog food and crying at the kitchen table, complaining that now they can’t take their 2nd Florida based vacation this year – all due to those baby-eating Conservatives who cut taxes for their ‘rich friends’. Yes yes socialist stupidity dies hard, but in the post-modern left wing nation state one should expect outrage over keeping one’s own money out of the hands of government and vote buying populist politicians. Simply stated tax cuts benefit everyone and generate more money and more wealth for society at large than socialized and fossilized programs of waste and ‘values’. Facts are facts.
Since Canada does not have any tax cuts worth mentioning about in the past 40 years let’s look at some recent US examples. Yes of course the Americans who give 5x more to charity than Europeans or Canadians are evil; yes we know that the Americans hate old people even though they spend more on state funded health care than anyone else; yes we understand that the Americans are stupid even though their university system is the best in the world and more US kids graduate from college as a % of the population than anywhere else; yes we know that they are uncultured baboons even though Americans read more books per capita and attend more cultural events per capita than Europeans. Yes yes the above is so obvious. But even so US tax cuts contain some interesting facts – which always annoy the socialist post modern do-gooders a.k.a. anti-reality jokers.
Bush the big government high spending ‘compassionate conservative’ [ie. liberal] did one smart thing. He cut taxes by $1.3 TRILLION in 2001. The result has been a US economic boom. Employment is at all time historic highs; disposable income is growing by 1 % and more per annum; net wealth is now over $55 Trillion another all time high; and governments have seen their revenues rise. All ‘classes’ and levels have benefited from the tax cut. As for the rich well they actually pay more tax now then before. Between 2002 and 2004, tax payments by those with adjusted gross incomes (AGI) of more than $200,000 a year, which is roughly 3% of taxpayers, increased by 19.4% -- more than double the 9.3% increase for all other taxpayers. Between 2001 and 2004 (the most recent data), the percentage of federal income taxes paid by those with $200,000 incomes and above has risen to 46.6% from 40.5%. So much for ‘only the rich benefit’ cry over tax cuts.
For those who wail that tax cuts destroy the welfare state think again. In the US capital gains receipts from 2002-04 have climbed by 79% after the reduction in the tax rate from 20% to 15%. Dividend tax receipts are up 35% from 2002 to 2004, even though the taxable rate fell from 39.6% to 15%. Lower rates produced increased revenues and higher incomes mean higher tax payments. Between 2001 and 2004, the percentage of Americans with an income of more than $200,000 rose from 12.0% to 14.2%. The percentage of Americans earning more than $50,000 a year rose from 40.8% to 44.2% -- and that's just in two years. While these statistics are not inflation-adjusted by the IRS, price rises were relatively modest during these years, so adjusting wouldn't alter much.
Tax cuts do work – for all of society. So why do the socialists and media pinheads moan about tax cuts? Simple: they subscribe to left wing economic populism and emotionalism and ‘demand’ not supply side economics.
Besides the dimwit Canadian economist J.K. Galbraith who thankfully has died, the great economic ‘intellectual’ icon for the left was and has been his arrogant eminence Lord Keynes. Wrong on almost every single major economic point of fact, Keynes was the politician’s fan favorite since he justified massive intervention by government into the market. Keynes came up with the colossally insipid idea that contra-cyclical government make work projects and deficit financing to accelerate welfare and white elephant creations, would stimulate demand and thus the whole economy. As I just wrote above the old boy of course had it completely backwards. It is actually the stimulation of supply-side economics and controlled monetary policy that creates wealth; wages and ergo, consumer demand. By stimulating the supply side of the economy you stimulate investment, profits and job creation. But you won’t find much supply side theorems being taught at university – a playground owned by Keynes and his supporters. This is why so many who graduate are financial and economic airheads.
The supply side school has its intellectual pedigree from the so-called Austrian school and worthies such as Ludwig von Mises and Friedrich Hayek. They believed that wealth creation starts with entrepreneurial activity—new ideas for goods or services, new and more efficient production techniques and new technologies. Lower tax rates stimulate this activity by increasing incentives for saving, investment, risk taking, and work effort. By lowering taxes, and increasing investments and jobs, wages and productivity will rise, improving living standards and disposable incomes. As more money is made available economic growth picks up as all sorts of goods and services are bought stimulating even more suppliers to rush in and fill various market niches with new concepts and innovations. With a controlled monetary policy and low inflation the rising economic tide lifts all boats. Coupled with free trade you truly would create an economic dynamo.
If you really wanted to cure poverty; have a tearful ‘African commitment’; generate high paying and rewarding jobs; and finance some schemes of welfare you need to have a supply side policy coupled with fair and free trade. Government coercion, monopolies, corporate welfare, agricultural and commodity welfare and redistribution schemes and demand side management need to be abolished. But instead of looking at facts and at history and understanding what produces wealth and power bleeding heart politicians will instead tax, spend, and ‘manage’ their way into bankruptcy. But hey you have your ‘national values’ as compensation even as you become poorer!
