Quote:
Originally Posted by realcoray
That isn't me saying take from the rich savers to give to the poor spenders, but just saying that a 1$ tax cut for people even moderately successful people, is probably less in terms of trickle down than some people want to believe.
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You are correct in terms of math with your example. A few dollars won't matter even though we are talking a lot more than a few dollars in the real world. However, psychological effects must be considered as well. That's why when tax rates are lowered, tax revenue goes up and stays up. It's not just the $1 that the rich are getting to save that makes the revenue go up. It's the feeling that they aren't being punished that matters.
If you're in the top tax bracket in this country, you're being tax almost 50% of your income by state and federal. The majority is federal. You have to make arguments and provide proof to keep more than that. Personally, that's a huge downer to me. Especially, when you go to the grocery store and the person in front of you buy food on food stamps and then hops into a car that costs more than the one you own. The number one vehicle of millionaires for a number of years was the F150. The Honda Civic was on the list too.
Couple that with the fact that nearly 50% of the people in this country who work pay no Federal income taxes. None not one red cent! That's people who make up to nearly 50k a year that supposedly can not even pay $100 to the funding of this government. That's just over $8 per month or 27 cents per day that they can't be burdened to pay. Yet, we are told the rich need to pay their fair share? Huge psychological downer on those of us that work very hard for our money.
Not all of the spending government does is justifiable and necessary. The majority of people, including those supposedly crazy Tea Partiers, are not trying to stop government spending. People just want it under control. Is it too much to ask that duplicate programs or programs that don't work be reformed and have their costs amended?
Also, keep in mind government employees do not pay taxes. As more of the work force becomes government employed, the burden of paying them fails on private sector companies. A private sector that also has to pay its own employees and supply them with benefits in many cases while keeping costs low enough to compete against other countries that have lower standards of living, where employees are paid less, and where corporate income taxes are less. We have the highest corporate income taxes in the world.