Wednesday, October 26, 2011

Tax cuts for wealthy helped U.S. economy to fail

MSN Money - 'Why U.S. should spread the wealth'

...Workers were helping to increase the size of the pie, but income did not trickle down, and their share of the pie was no larger than before...

There are some glaring signs that the Occupy Wall Streeters are making some headway in the opinion of the nation's economic thinkers. It brings up the age-old double dicho regarding the government's true role in a capitalist society.

Is government a business, or is government the means by which business may be done?

Today's lead article on MSN home pages is a re-print of a Mark Thoma article from the Oct. 14 edition of “The Fiscal Times” that holds the wealthy not only don't pay their share of taxes, they should. Why? Because the Bush tax cuts failed to prove the old business school adage that “A rising tide lifts all boats.” (click here for Mr. Thoma's article)

It didn't happen that way, after all.

Not even close, according to Mr. Thoma.

The result is that productivity has gone on the chopping block while a harsh and hostile economic climate attacked America's all-important markets for housing, education, transportation and the money it takes to finance those top three big ticket items – the home, the education and the car.

“America sacrificed equity for the false promise of efficiency and growth, and society is now more unequal than at any time since the early part of the last century,” his lead statement reads in the opinion piece appearing today on millions of computers world wide.

It's as simple as the wise statement made by Henry Ford when he said it would be utter folly to employ men to make his cars and then fail to pay them enough that they could buy, pay for, and drive one of them.

Simple, yes, but oh, how true. True enough that one of the world's largest and most productive corporations chose the subject for the day's lead article on its home page.

“For example, the Bush tax cuts were justified, in part, by the assertion that equity had overshadowed efficiency in tax policy. Taxes on the wealthy, and the inefficiencies that come with them, were much too high, it was argued, and lowering taxes would cause output to go up enough to lift all boats...In fact, there's little evidence that the Bush tax cuts had any effect at all...,” Mr. Thoma wrote.

The date is important. October 14 is that inauspicious day before the #OccupyWallSt protests went global and coast to coast with cries to “End the Fed” and tax the rich, redistribute the world's wealth and reverse a disturbing trend that seems to call for a very small class of super rich and a huge class of have-nots headed straight for a brave new fuedal system of lock step serfdom.

It makes for interesting reading.

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