PROSPERITY & TAXES

America’s economic strength lies in the productivity of the American people. As I stated in a March 2009 article, if we’ll turn Americans loose with greater incentives to produce and invest, history shows our economy will come back strong and prosperity will return to our nation.

The incentives for increased production and investment in any economy are low taxes and a low cost of doing business. It just makes sense that a person will work harder if they get to keep more of what they make. The less they get to keep, the less work they’ll want to do. The same principle apples to investors. When tax rates are low, people always work more and invest more. When rates are high, they work less and invest less.

Onerous government regulation raises business costs. Instead of producing goods and providing services, workers are diverted to non-productive activity complying with government paperwork and seeing that regulations are carried out. The less American businesses are regulated, the more than can produce with the workforce they employ.

More work, more investment, more productivity adds up to a booming American economy. The catalyst is increased economic freedom through low federal taxes and less federal regulation. The bonus for the government is surging federal revenues which can help pay down the national debt, but only if Congress quits spending so much money. Federal income taxes have been cut four times, and each time the economy has grown vigorously and tax revenues have expanded substantially. Tax cuts don’t increase the debt or cause deficits. Only runaway spending accomplishes that. Every dollar retained from tax cuts is either spent in the economy or invested, resulting in jobs and paychecks.

To provide incentive for Americans to work and invest more, the Bush tax cuts set to expire this year should be renewed and further across the board individual tax cuts should be implemented, U.S. corporate taxes – the second highest in the world – should be cut significantly, and capital gains taxes, which is a tax on investment, should be temporarily suspended and then permanently lowered. Business should be able to write-off equipment purchases faster. Government regulation of business should be reduced.

Big government, higher taxes, and socialistic policies will only make us poorer in the long run. But if we take steps to lower taxes and reduce regulation, we’ll soon have an expanding, job-creating American economy with work for everyone who wants it. Many will resist these measures. We need conservative fighters in Congress to get the job done.