Tax Power Not Designed To Coerce Behavior - Gary Abernathy, RCEnergy
... the Fifth Circuit’s ruling is a welcome nod to the fact that the federal government cannot take tax laws intended to increase revenue and twist them merely to regulate business activities. ...
I mean, do these people not remember Ronald Reagan?
“If you want more of something, subsidize it; if you want less of something, tax it.”
But Ronald Reagan ignorantly reduced high marginal ordinary income tax rates, destroying the need for the owners of capital to make the arbitrage decision going forward between either choosing low long term capital gains tax rates or the high ordinary income tax rates.
The owners of capital had been no dummies and had picked the low rates for years. That drove domestic investment throughout the post-war because it had to, and produced the good paying full time jobs and GDP which too few even remember now. But faced with an easier path to low taxes, they took it.
The tax windfall set the conditions for the hollowing-out of the U.S. economy when those billions of dollars met the opening to China in 2001, where they worked for pennies on the dollar and regulations were practically non-existent.
20,000 domestic manufacturing establishments alone were lost in the wake of the 1986 tax reform, and 70,000 more after 1997. Millions of manufacturing jobs went with them, and with them the American middle class and the American dream.
All because Ronald Reagan, the liberal, thought rich people knew best what to do with their own money.
In the mid-1980s we had maybe 35 billionaires and people in their 20s routinely married and bought their first home. Today we have 1,135 billionaires and people are nearly 40 before they can afford to buy their first home. And we have Ph.D.s all over the place who can't spell in their own language let alone in a foreign one.
Put a random set of 100 people in a room and the fact is only 25% of them are college material, but the rest need and deserve good jobs the same as they do, and they aren't going to be "knowledge" jobs.
I can still remember my company's HR head telling my truck-driving employees in the 1990s that they had to start thinking of themselves as "knowledge workers" instead of as what they were. I got the hell out of there. By 2003 most of those new "knowledge workers" of mine had lost their jobs driving truck when the company had to "restructure". Just one tale in tens of thousands of such tales.
America will not begin to be great again without tax policy which favors the American people over some eggheaded libertarian's idea of a principle which favors only the rich.
