Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.2 9/18/84; site loral.UUCP Path: utzoo!linus!decvax!ittvax!dcdwest!sdcsvax!sdcc6!loral!simard From: simard@loral.UUCP (Ray Simard) Newsgroups: net.flame Subject: Re: Fuzzy headed liberal Message-ID: <636@loral.UUCP> Date: Wed, 7-Nov-84 15:26:18 EST Article-I.D.: loral.636 Posted: Wed Nov 7 15:26:18 1984 Date-Received: Thu, 8-Nov-84 19:17:31 EST References: <570@loral.UUCP> <924@opus.UUCP> <610@loral.UUCP> <611@watdcsu.UUCP> Reply-To: simard@loral.UUCP (Ray Simard) Organization: Loral Instrumentation, San Diego, CA Lines: 53 Summary: In article <611@watdcsu.UUCP> dmcanzi@watdcsu.UUCP (David Canzi) writes: >> The deficit is not caused by low taxes - it's caused by high >> spending! Period. Only. Solely. Nothing else. > >DRIVEL! The deficit is a result of *both* taxes and spending. >Claiming that high spending is the *sole* cause of the deficit is like >claiming that the "2" in "5-3=2" is *entirely* the result of the "5", >as if the "3" has nothing to do with it. In a strict mathematical sense, of course you're correct. That was not my point. The basis for my original statement is: 1. The government does not specify tax REVENUE, but rather, tax RATES. Therefore, the actual revenues (the "5" in your analogy) are based both on rates and the tax base on which they apply. 2. Above a certain point, increased tax rates begin to reduce the economic vigor that produces the tax base, thereby reducing the base itself. Rates increase, and revenues hold even, or drop. If you reach a 40% or 50% bracket on your marginal dollar, what happens to your eagerness to put forth the effort and risk to earn that dollar, compared to your eagerness to earn the dollar that was taxed at 20%? Kinda drops, doesn't it? 3. It is unfair to tax away more than a certain percentage of anyone's income. When you contribute of your time, effort, talent and risk to produce something of value, you have earned some amount of compensation. While, by general agreement, we all part with some of that in order to have a government, there is an upper limit above which nobody should be taxed. I put that point at about 20% to 25%, tops. Not only is taxing above that just plain unfair, it reduces incentives to produce and earn (see 2 above). The gist of all this is, in our current state of affairs, the element of the equation that is out of line is the spending side. The revenue side is, if anything, too high, not too low. When you consider the full equation, not just revenues-spending, including all the secondary and tertiary effects, it is good economic and social sense to address the spending side, and, as soon as possible, cut taxes further. -- [ I am not a stranger, but a friend you haven't met yet ] Ray Simard Loral Instrumentation, San Diego {ucbvax, ittvax!dcdwest}!sdcsvax!sdcc6!loral!simard ...Though we may sometimes disagree, You are still a friend to me!