Cutting the top tax rate (currently those making over $370,000) is something that has been promoted by many of the the Republicans currently running for president in the form of a flat tax (or variations of it such as the 9-9-9 plan). There are many arguments for this notion and many against.
It’s possible to point to historical data and claim that such tax cuts either do or do not lead to:
- Economic growth
- Income growth
- Wage growth
- Job creation
I’m not going to engage in such armchair analysis. I have my opinions, but they are just that, opinions, and are hardly founded in real scientific reasoning.
What I do want to say about it is that human nature and the way that politicians operate makes such tax cuts destructive to our long-term economy. Why? Because they do not pay for themselves in the short term. That means deficits increase. That’s fine, as long as the tax cuts are matched with major cuts in programs. The Republicans talk about cutting “wasteful spending”, but at the end of the day, they cut very little. So if you believe in “small government” you need to wake up a bit and realize that cutting taxes is not the first step to small government. The first step is cutting programs, and 99% of politicians just don’t have the guts to do that.
The problem in a nutshell:
- Democrats raise taxes and spend like crazy
- Republicans cut taxes and spend like crazy
That’s why I support Democrats that are fine with big government but want to make it more efficient.