May 5, 2003

Tax cuts for the rich! That is the vociferous and beguiling battle cry being yelled by Democrats from sea to shining sea like a never-ending nightmare. These people don't believe in tax cuts during times of economic prosperity or economic weakness. What exactly is their agenda?

To better understand the mentality of these people, let's look at the income taxes the President wants to cut for these 'rich' people and see what relation they have to working families and the economy.

Right now 50% of the workforce in America pay 96% of the income taxes collected by the federal government. That means many working families are members of what Democrats have affectionately labeled 'the rich'. Are you a member of this reviled group of individuals? Many don't consider themselves rich, yet the predominant group of taxpayers in that fifty- percentile is the working middle class!

Look at the numbers. The starting point of income earned that would put taxpayers in the group that pays 96% of the income tax bill is $26000 a year. The median household income in Richmond County is $28,646. That means the average family in Richmond County is the very people those in Congress against the President's economic stimulus plan consider 'the rich'.

So how do income tax cuts lead to economic stimulus and eventually a greater amount of taxes collected as a result?

Let's say that the President's tax cut amounts to an extra $100 of refund savings. The only thing those against the cuts see is the loss of $100 in collected tax revenue, yet most economists agree that it's not quite that simple. Factoring in how that tax cut relates to middle class families and its application to the economy looks much different in reality.

Someone receiving this cut now has the funds needed to purchase the weed eater (it could be any article of your choice, stay with me) they've wanted to buy but never had the money for. This person buys the weed eater at a store which also provides employment for others. That store then has to order more weed eaters from the company that manufactures them, which in turn employs people to produce the items ordered. The more orders they receive, the more employees needed to provide the service. The manufacturer may even need to order many of the parts used to assemble the weed eaters from companies that would also employ people.

In every case, there is an incremental increase in employment, manufacturing, and subsequently in the amount of taxes that will be collected from every exchange in the process. The most notable is the increase in collected income tax because more taxpayers are working and earning income that will be taxed. It has also been shown that businesses begin hiring more workers immediately following the passage of tax cut legislation, which creates an instantaneous stimulus to the economy.

Of course a vibrant economy is what everyone eventually wants, but right now 98% of the Senate Democrats don't. Why? Because economic stimulus that will immediately boost the economy would not bode well for Democrats who have predicated their success in the next election on a failing economy. The problem for their agenda is that the economy is already showing strength and is growing.

Why are working families constantly denigrated by tax and spend politicians, who think honest, hard working Americans they consider rich, might actually get a little financial assistance through tax cuts? Especially when everyone agrees that giving these families some of their money back will lead directly to economic stimulus, which means prosperity for America. Isn't that supposed to be our ultimate goal and the sooner the better?

Lee P. Butler