Saturday, October 02, 2004

Taxes: With the presidential debate on domestic issues coming up, I'd like to say a little about taxes that will be good to keep in mind as you watch.

First off, the way taxes are structured in this country, we earn taxes in one way only--when money changes hands. This means that the slower the economy, the less money that is going to be made on taxes. That's just the way it is.

Even the LA Times, liberal as their agenda is, recognizes that Kerry's plan won't come close to generating the revenues he says it will. It's simple math--if people know that moving their money around will result in higher taxes, they won't move their money.

It's like a pool with a filter in one end. If the water just sits there, nothing is going to pass through the filter. Making the filter bigger won't help. The water is still just sitting there.

What's needed is motion. A pump, a vacuum, something, to get that water moving around in there. If the water's moving, then even if the filter is smaller, you'll still get more water through it than with a bigger filter and no pump.

This analogy isn't perfect, however, because it doesn't take into consideration that the taxpayer is intelligent. John Q. Billionare could look at the tax rate and decide his investments weren't worth the risk, with that large a chunk taken from them. He then pulls his money out of the investments, meaning less money to fund business like you and I work for, less money in the coffers of the government, less money all around.

There are plenty of tax shelters for him to stow his assets in. He's safe. In the meantime, the government coffers are empty.

So keep in mind that economic movement is the real key. Listen for who sounds like they're going to get things moving. Then everybody benefits. More jobs, more opportunity, more rewards for your effort, and, yes, believe it or not, more money for the government.

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