Republican economics? Drastically reduce taxes while expecting the budget to balance itself? I've never heard that one explained. If one thing supply side economics have taught us its that cutting taxes does not increase government revenues. Or are you one of those who thinks that we can just cut our way out of $14 trillion in debt?
And $1.4 million does not equal $11.6 trillion. But when you multiply that tax cut by all the various millionaires and billionaires over several years...It begins to add up. And don't forget Pawlenty's call to eliminate capital gains, estate taxes, etc.
Lest we forget...The top 10% of the population owns 80% of the US stock market. So while the rich like to complain about top marginal income tax rates, they in fact have most of their wealth sitting in securities that are taxed at discounted rates (15% on capital gains and dividends). This is how the rich end up paying lower effective tax rates than working stiffs.
And before you get all "but we can't hurt the job creators" on me...Tell me one thing...What economic benefit (other than liquidity) does the secondary buying and selling of securities do for the economy? And why should the gains on such sales be tax-advantaged?
I favor tax-advantaged treatment for investment capital that is actually put to work as venture capital for starting up/expanding firms. Someone that buys shares in an IPO is actually providing investment capital to a corporation-- they are investing in the economy. And perhaps gains on this sort of capital deployment should be tax advantaged.
But let's take an established corporation that is not selling shares on the market...In other words, you are the secondary purchaser of those company shares. Someone long before you bought the IPO shares and actually provided investment capital to the corporation. But once the original buyer sells those shares...That is where the tax-advantaged treatment should end. Because the next person in line may buy the shares at a higher price than the original owner...But he is merely providing capital to the seller of the securities...His capital is not being deployed by the corporation that initially sold shares. Secondary stock sales have no net economic benefit to the issuing companies. Arguably, the only benefit that secondary sales provide is to create liquidity in the market...But this benefit should not receive favorable tax treatment.
Now I got off track...But the idea that we can cut our way out of the debt without raising taxes is absurd. I believe we will ALL have to pay higher taxes if we want to keep the social programs that our society has grown to love...And yes, that means the middle class will have to pay higher taxes alongside the wealthy.
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