Today I want to talk taxes. Anyone following the election knows that cutting taxes is on the agenda for both sides. I want to touch on what I know of their plans in combination with how I think about it.
Obama says he wants to cut taxes on the 95% of Americans who make under $250,000 a year. Yes, I am all for that, especially since I don't make anywhere near that amount. Leaving more money in my pocket is a good thing to me. Sounds good so far. For someone like me $250,000 sounds rich. Then I thought about it and realized that if I started a business, it is easily possible to go over that amount. That is where I get hammered. Because I work hard to succeed, I get penalized, because the Obama plan will raise taxes for those who make over $250,000. Why should I bother then?
Obama wants to tax the heck out of major corporations. On the surface it would seem obscene that a company should make $500,000,000 in profits, until you look at it more closely. These company profits don't all go to the CEO. He's just an employee. The profits go to the stockholders. Who are these stockholders making these obscene profits? Most of them are you and me. You have a retirement account at work? Yep, that's how they make their interest. If Obama taxes the major corporations at higher rates, I will see a decrease in my retirement growth. He's taxing ME! The lower middle class man.
Now, I am not going to be happy that my retirement fund is not growing the way it should be and am going to want some answers. Myself and millions of other shareholders who hold stocks in their retirement funds. We are going to put pressure on the company to increase their profits. In doing so, the company lays off a bunch of workers. That's not going to help the economy. The company is also going to cut back on new projects. Well, there is more jobs by the wayside. They are going to cut their research into new products. Yep, more jobs lost, and also now our creativity and technological advances are slowing down. All of these people out of work won't be able to buy all the things they were buying before, so other companies have to start laying people off as demand for products decreases. You get the picture.
Not only will jobs be lost, and research into new products be stifled, but the companies will pass along those increased costs to the consumer. We will see it every time we go and buy something. With increasing costs of buying our necessities, we will be less apt to buy anything beyond that. Those companies than begin laying off workers as demand decreases. Pretty soon we find ourselves in a depression.
Personally, I believe the rich need to be rich. Companies need to make obscene profits. For rich individuals, they will spend more and invest more which stimulates the economy. With Corporations, they will invest in researching new technologies for the future, hiring more workers, building more buildings, all of which creates jobs. All of those people now working will then be spending so other companies will have to hire more workers to keep up with the demand. Lower taxes for all leads to a better economy.
Say we give Exxon a targeted tax break if they research alternative energy. They will do it. Say we increase the taxes on Exxon. With less money, are they going to do the research on alternative energies? Nope. They got to keep all us little guys with our little retirement funds happy.
In the end, I say cut taxes. Cut taxes on the 100% of us who pay taxes, whether individuals or corporations, cut taxes.