I have a simple proposal to solving our recession woes in three easy steps:
- Drop the current corporate tax rate from the high rate of 35% to 10%.
- Cut in half the capital gains tax rate for everyone.
- Cut in half the income tax rate for everyone.
I choose these three steps based on the principle that you get more of what you reward, and less of what you punish. In each three cases, taxes punish business, investing, and working. By dropping the tax rates on all three, the punishment will be less, so the activity by the people will be more. If these three steps were taken today, the economy would go into overdrive almost instantly.
“But a lower tax rate means the government will get less money!” Really? Good! If we as a family or business have money problems, we respond by cutting back expenses. Government should do the same. Instead, government has responded by ramping up the spending. If you are up to your eye-balls in debt, does it make sense to max out even more credit cards for additional things you don’t need? In hard times, the government should be spending less, not more.
A trillion dollars spent here, a trillion dollars spent there. When will the government stop spending huge amounts of our money?