At the risk of appearing to be a shill for Sowell I’m recommending that you read another series of his columns:
Sowell makes it easy for people other than devious politicians with inflated egos to understand the effects of supply and demand versus the politicians’ actions on the “affordability” of those products that we need or want.
All three presidential contenders want to enact one or another price control on fuel but none of them wants to tap our greatest reserves of oil.
Barack Obama wants to levy an additional tax on the oil companies, which will increase the price of fuel. Apparently he sees it as punishment for their supposed greed. But guess who eventually gets punished. Clue: It’s not Obama or the oil companies.
Most of the liberal politicians today want to increase the income taxes of the “wealthy” taxpayers. Think about it. How do you actually tax the wealthy? The vast majority of them are in controlling positions relative to their income. Tax their businesses’ profits and they will pass it on to consumers of their products. Tax their salaries and they will raise them — and pass the cost on to consumers.
Consumers of products and services pay all the taxes regardless of their income. Since the non-wealthy consume vastly more products and services than the wealthy, the non-wealthy pay vastly more of the taxes. It doesn’t matter who files the return and sends a check to the IRS, we all pay too much in taxes in the end.
Have you heard someone boast that they don’t have to pay income taxes? Next time give them a lesson in trickle-down taxes and economics.
January 20, 2008 – 5:50 pm
Liberal politicians and pundits like to chuckle or snort when conservatives talk about supply-side economics. Proponents of supply-side economics roughly believe that reduced tax rates cause the economy to expand to the point that the government will collect as much or more tax revenue as it would have at the old higher rates. There have been studies that verify this and others that dispute it.
It’s clear that people disagree on what the right tax rate is, but do you suppose they can all agree that neither zero taxes nor a 100% tax rate is the right answer? Probably not, but I think most will. Even fiscal conservatives agree that some amount of government is necessary. We need to at least maintain order and defend the nation. I think sane liberals (that excludes Dennis Kucinich) would agree that a 100% tax rate would cause our economy to collapse. Not many people would continue to work for someone else when they are taking no pay home. They would have to self-produce some of the essentials of life and barter for the rest.
So, if a sane liberal — or anyone else — actually does believe that a 100% tax rate will destroy the economy and result in reduced government revenue, that person believes in supply-side economics. They believe that a tax rate lower than 100% will result in greater government revenue.
The real disagreement then is not on the theory of supply-side economics but on what rate is the right rate. A theoretician might argue that the right rate is the rate that maximizes government revenue. Conservatives think that rate is lower than the current rate; liberals think it is higher. Unfortunately we don’t have economists smart enough to give us the right answer, so we are left with experimentation.
Two of the last four presidents have significantly reduced tax rates with favorable results. If the next president is a Democrat (heaven forbid) and she raises taxes, at least we will get a data point in the other direction.
Why does the Internal Revenue Service encourage us to file our income tax returns electronically? The answer is quite simple. Because they can process electronic returns faster and less expensively than paper returns. But that begs another question. If it is less expensive for the IRS to process electronic returns than paper returns, why do we have to pay extra to file electronically?
E-filing costs ten dollars or more whether you pay it directly or it’s included in the cost of your tax-filing software. Filing by mail only costs about a dollar for most people (postage, envelope, paper and printing). E-filing is more convenient for most of us too, but that doesn’t justify our having to pay about ten times the cost of filing by mail.
Each year I prepare and file three returns: my own, my mother’s and my wife’s mother’s. It took me less than an hour to print the returns, address the envelopes and mail the returns. I saved about 27 dollars. Until the IRS lowers the cost of e-filing to about that of filing by mail, I will continue to file by mail.
The current charge for e-filing is just another tax.
