Steal From the Rich Once Again

Steal From the Rich Once Again

One school of thought about creating jobs and stimulating the economy is to make the rich pay for it. Under normal circumstances successful people in this country do create jobs and stimulate the economy. The Free Market is the perfect environment to provide incentive for wealthy individuals to invest in businesses that sell goods or services and earn profits. That process creates jobs, profits, and tax revenue.

The Free Market allows individuals who have a great deal of money to invest in a business that will pay dividends or interest, or salary as a reward for the capital they invested. Their money was put at risk to earn a return that was greater than the small percentage available by keeping the money in a bank or other safe investment. The larger the risk the greater the reward.

A consideration of how much risk an investor (Wealthy person) is willing to accept is a function of how much return is available as a result of the risk. One factor that impacts the return is the percent lost to taxes. Almost always the capital used to put at risk for an investment was already earned and the taxes paid on those earnings. Money used for an investment has almost always been earned and taxed prior to its life as an investment. Investing previously earned income, putting the money at risk for a higher return is what wealthy people do with previously earned income.

The risk will create a business that hires employees to manufacture, sell, and provide the services that will earn a profit for the business and provide the return on investment for the investor. Additional benefits are the business has to pay rent and buy supplies and interact with other small business, stimulating the economy. Local, State, and Federal taxes are all paid when a successful business stays successful. One last important impact of a Free Market induced investment. Employees not only stimulate the economy by consuming goods and services as individuals and families, but they are all tax payers. Tax revenues at the local state and federal levels increase significantly.

This seems like a pretty good deal for everyone when the Free Market stimulates investments.

Another way to make the rich pay to stimulate the economy is to punish their income. Increasing taxes on the wealthy, regardless of how you define the wealthy is the preferred plan for some political candidates. Raising taxes on those who earn a lot of money at best has a limited impact on revenues. Raising tax rates for the wealthy will not stimulate investment. It will change the calculation that investors make to determine how much risk to endure to earn a return on investment. Less money will be invested and less return on investment will reduce potential tax revenues.

Increasing the taxes on the wealthy won’t stimulate investments and create new jobs, but for those who want to make the rich pay their fair share, the hope is to collect more tax revenues. Making the rich pay higher taxes has never created any significant increase in tax revenues. It has been tried and it has always been a disappointment.

The free market stimulates local, state, and federal economic activity and increases tax revenue. It is a basic economic fact.

The act of increasing taxes is done with an expectation of increasing tax revenue. It never increases revenue as expected or hoped for, but even if it did, what will government do to stimulate the economy? Spend government money to create jobs? Try to earn a profit with tax revenues? If bureaucrats and elected politicians has those skills that’s what they would do to make a living, not public service.

Do we really want bureaucrats and elected politicians making decisions on how to stimulate the economy? Do they have a successful track record of earning profits and making money? How well have they done with the tax revenues they have been collecting and spending for the past 50 years?

Do we want wealthy men and women to invest their money in ways to make more money? The people who have already made a ton of money in the past and want to continue making money by investing in business and earning profits have shown they know how to successfully stimulate the economy.

I prefer to let the wealthy stimulate my economy in a free market environment and let the bureaucrats and elected politicians sit on the side lines and try to get reelected.

Let the Free Market be Free!!!!

 

Gino

About gino984

A well fed middle aged male with strong opinions and a sense of humor. I was a Commissioned Officer in the United States Army Military Police Corps. I also spent some years in manufacturing management in both union and non union environments. I know how to lead and how to supervise. I also know how to share what I know. My degree is in Criminal Justice so that means I have a background in Psychology and Sociology. When you couple my Law Enforcement and Security training and experience with my education and experience in management and leadership you get a unique view on Supervision and Leadership.
This entry was posted in Economics, General Political Issues, Leadership and Supervision, Social Issues. Bookmark the permalink.

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