TARGET: GOLDEN GOOSE
As a rule, I try not to re-hash topics I've covered in the past. But with the current state of our economy and congress' child-like understanding of both the cause of it, and solutions to it, I felt a refresher coarse might be in order.
As congress fights among themselves about whether or not to extend the current tax rates, or raise taxes on certain, but not all citizens of America, it occurs to me that in the future, we might want to consider a basic aptitude test as a requirement for being allowed to run for public office. Until that day though, all I can do is offer my free economic lessons and hope that prospective politicians take full advantage of it.
I'm going to make this short and sweet. If you think raising taxes on "the rich" is going to help the economy, you are wrong. First, it's not fair to tax one citizen at a different tax rate than another. Especially when it's done for spite, jealousy, or simple ignorance of economics. Second, if you want to "create jobs", who better to do that than the people who actually do the most hiring? I mean really! Who hires more people? The X-Box addicted, 87' GEO driving, Mamma's basement living welfare case? The small business owner who's business has never actually required the hiring of more than thirty people? Or the "rich fat cat" who's enterprises require a minimum of two thousand associates to staff adequately?
Who is more likely to purchase big ticket items like boats, cars, pools, planes, summer homes, or turn one condos at Charlotte Motor Speedway? The welfare case? Mr. Small Business? Or the rich guy? Considering that those big ticket items do not grow on trees, where do you suppose they come from? You guessed it, the American worker. That is assuming that their manufacturers haven't fled the country trying to escape excessive taxation...irony.
So though it may bother you that some rich jerk just bought his third 120 foot yacht, you need to remember that the purchase of that yacht employed hundreds of people and fed many families. From everyone who works for the yacht company to the guy who scrapes the barnacles off it's hull, and everyone in between...people made money from the rich guy's indulgences.
Reducing the rich guy's ability to indulge himself via higher taxes might make you feel better, but it ain't going to put food on the table of the guy who assembles yacht engines.
Third, the age old rule of "S#&% rolls down hill" applies today just as it always has. That means that even though I might not be rich, my boss is. And when his taxes are raised, I'll give you one guess as to who is actually going to feel the pain of it. Be it a smaller cost of living raise, reduced benefits, or another year without new equipment, I'll be the one who takes the hit. You see, rich guys don't just buy yachts, they buy entire fleets of new trucks for their companies...unless the cost of those trucks goes up due to taxation. Keep in mind that an unsold truck brings NO tax revenue, but trucks sold at a reasonable/less prohibitive tax rate will bring tax revenue.
They are supposed to be teaching this stuff in schools. So why is it up to me? I should be in bed by now!