2017-11-16 / Letters

Government spending 34% of GDP; we don’t have revenue problem

To the editor:

In a recent letter, Barbara Abbott’s diatribe about income inequality illustrates an ignorance of basic knowledge regarding taxation or improving an economy. Redistributionist policies reduce incentives to create wealth which leads to less economic growth, fewer jobs and a detriment to those lower on the income scale.

Often times concern over poverty gets confused with income inequality as if wealth is derived from or the cause of poverty of the poor. Nothing could be further from the truth. In each and every case throughout history in the United States and the OECD countries, when tax rates decrease, government revenue increases. We do not have a revenue problem we have a spending problem. Government spending was 2.5% of GDP in the early 1900s and is approximately 34% of GDP today. You can’t spend your way into prosperity.

Contrary to what Ms. Abbot stated, FICA tax is a misnomer. FICA is not actually a tax. It is an insurance premium which is returned at a later date. Everyone needs to have skin in the game. If you are suis juris and earn over the poverty level you should be required to contribute to the operating cost of government.

It is investing in the means of production that drives an economy. What provides the most social good? It’s a job. When was the last time you had someone who earns less than you provide you with a job? We need to incentivize the workaholic wealthy by allowing them to keep more of what they earn or they will just invest more in leisure time and society will be poorer for it. Those who are envious, jealous and angry at those that are more capable, can find joy in that the entrepreneur if incentivized will actually pay more income tax in absolute dollars.

Don R. Sheets
P.O. Box 332
Northport

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What drives the economy is

What drives the economy is demand. If there is enough demand, then those who have money (or access to it) will create new businesses and expand existing ones so as to cater to that demand and in doing so make more money. The notion that what’s holding the economy back is that the rich don’t have enough money, or that they don’t get to keep enough for themselves, just doesn’t hold up. The top 1% already own 40% of the wealth. How much more money do these people need before they will deign to use it to create more jobs? And while some rich people are workaholics, plenty of others became wealthy by being born into a wealthy family and taking advantage of special favors and loopholes that the wealthy have acquired through their outsized influence on politicians and public policy. The hardest working people I know of are low income parents who hold multiple jobs to try to put food on the table and pay the rent, utilities, medical bills, etc. What we ought to do is tax the rich at higher marginal rates than we do now, and use the revenue thus generated to (1) reduce the deficit, and (2) strengthen things like public education, job training, and access to healthcare that help people climb out of poverty and into the middle class. The tax bill before congress right now has that backwards. For example, it would tax college scholarships as income (God forbid some poor kid would get a free ride) while it preserves the carried interest loophole which allows billionaire hedge fund managers to pay income tax at the same rate as their secretaries. This is top down class warfare. Lastly, I wish we would all try to be civil. Disagreement is healthy, but calling another letter writer ignorant doesn’t advance the conversation. No one has a monopoly on truth or righteousness.

Tom, You and I agree. Crony

Tom, You and I agree. Crony capitalism is bad stuff. Gaming the system to your own benefit is different than capitalism. I am a capitalist and having spent more time then I care to remember in DC, I can tell you, that swamp needs some draining. If you haven't read Communist Manifesto by Marx and Engel, your argument is the same as there's. I'm not calling you a Marxist or communist, but when generalizations about all the top 1%, is a rough starting point. You immediately divide the "The hardest working people I know" you are clearly trying to divide this construct of the USA into the...."haves" vs the "have-nots" or the Burgoise and the proletariat. This is textbook Marx's class struggle. Making the world binary is not how the world really is in reality. And you further argue literally "taking other peoples money" (their personal property), and "spreading it out" to others. Here's an example: So three of us in a room and I have $100 and you a friend vote to beat me up and take my money, it doesn't make it morally right for you to take my money. It is an immoral act in practice. It is stealing last time I looked at the 10 commandments. I know you can understand the concept of free....I know you understand hard work and property rights. You sound like a man that has worked hard for his worth and his property. Marxism and socialism, in the end, did what you said. Lenin and Stalin did take the property (money) from the rich. They got rid of all the leaders, and centrally controlled (like Medicine, and the markets) the labor and production, They held hands first and said, this is all so good, then, people wanted more free stuff. They got used to this free stuff world. The worked less, got lazier, wanted more and better for free. The dissented, and...well, he killed them. He and Stalin killed millions, Mao did the same in China. Same playbook. He too killed millions. Capitalism, warts and all, is selfless. If I build something for you (taking a chance and investing in equipment) on the idea that I am going to provide something you WANT, I am putting YOUR needs in front of mine. In your vision, the hospital is to provide jobs, Maybe these people you point fingers at about "how much more money do they need to provide jobs" is a generalization and I feel missing the point. What if you had $1mm dollars. What company would you start? What would you sell? You think Jeff Bezos is going enter your space and crush your investment? I bet you would think long and hard, put lots of energy into an idea. Would you hire the people first or would you think of a product that people would buy and then see if it succeeds? Im going into depth here because your generalizations are an attempt to simplify a very very complex world we live in. But the alternative to capitalism....socialsm is a disaster, but great to think about.... When you sap the energy from people by removing the incentive to make their lives better through harder work, better education, by taking their money, you reduce the incentive to advance. Think about it this way...You give away something for free, and people expect it to be free tomorrow. Then they want more free stuff. I am perplexed by your "taxation of scholarships". So when we do give something away for free we also are going to tax that too? Lastly, as I wrote earlier, there is a clear path out of poverty. It is proven and irrespective of race is universally applicable in the USA. 1) Graduate from high school. (don't just collect a diploma, LEARN while getting one) 2) Get married and don't have kids before 21 3) Get a job Do these three things, and chances are, 98% of the time, you will avoid poverty. And even then, you STILL have to be prepared to change jobs, go to more school to learn new trades. Graduating high school does not mean, never read a book again. Your path to utopia sounds a lot like Marx's communist vision of the world, that is littered with 100mm dead bodies. I suggest you freshen up on Communist Manifesto and compare what you write above.

Three rules for staying out

Three rules for staying out of poverty So what are the best ways to avoid falling into poverty? The Brookings Institution has spent a great deal of effort studying this issue. And presidential candidate Rick Santorum has been quoting their findings on the campaign trail. Brookings whittled down a lot of analysis into three simple rules. You can avoid poverty by: 1. Graduating from high school. 2. Waiting to get married until after 21 and do not have children till after being married. 3. Having a full-time job. If you do all those three things, your chance of falling into poverty is just 2 percent. Meanwhile, you’ll have a 74 percent chance of being in the middle class. Applies to everyone These rules apply to all races and ethnic groups. Breaking these rules is becoming more commonplace, unfortunately, for all racial groups. By contrast, young adults who violated all three norms — dropped out, got married before 21 and had children out of wedlock and didn’t have a full-time job — had a 76 percent chance of winding up in poverty and a 7 percent chance of winding up in the middle class.Our research shows that of American adults who followed these three simple rules, only about 2 percent are in poverty and nearly 75 percent have joined the middle class (defined as earning around $55,000 or more per year). There are surely influences other than these principles at play, but following them guides a young adult away from poverty and toward the middle class. http://jacksonville.com/opinion/editorials/2012-01-27/story/three-rules-...

This writer does not seem to

This writer does not seem to have a grasp on recent history. Remember Reagan and George W Bush's "Trickle-down" polities and the economic disaster they created?