A quick thought...

If tax revenue was such an issue, shouldn't the person in charge of our treasury be someone who actually paid his taxes? I mean, Al Capone went to jail for tax evasion, Timothy Geithner was made Secretary of the United States Treasury. No wonder law school can be confusing.

Tax Cuts Part II

In the below post there are a few things I want to clarify. First, I was not trying to be biased in my comment about taking from the rich to give to the poor. There are few people (Scrooge excepted) who think that people with more have no responsibility to help those who have less, the argument that arises is whether the government should have a hand in the sharing; liberals say it should, conservatives say it shouldn't (as a rule). I recognize that's not where all taxes go, its just where a lot of them go. Conservatives also believe that taxes go to a lot of things they probably shouldn't (like Planned Parenthood).

Also, low taxes will not expand the economy no matter what else happens. Low taxes tend to help grow the economy. Let me reiterate, tend to help. The economy can still struggle when the taxes are lower than they were the year before, and it can still grow when the reverse is true. Taxes are only one of many factors that effect the size of the economy, lowering taxes will not cause the economy to boom by itself, though it will tend to have a helpful effect. Raising taxes will not tank an economy by itself, but when a number of other factors (such as uncertainty, heavy regulation, and too many government mandated programs) are putting pressure on the economy, raising taxes will only put more weight on an already overloaded economy.

My comparison of Texas and New York was a comparison of the best and the worst, but it cannot be explained simply by natural resources. Yes, having massive amounts of oil sitting under your state might help you with the trucking industry (which California ran off), but it doesn't necessarily help you lure in the tech industry. New York has been increasing taxes and programs at a staggering rate, and businesses have been leaving the state equally fast. New York taxed productivity to pay for people who were not being productive. It shouldn't be surprising then that productivity in the state plummeted, and their programs are going bankrupt.

There is no silver bullet to reviving the economy, and the government's job is not to micromanage it. The answer is not no government regulation, but neither is it heavy regulation beyond reason. The answer is a balanced solution that utilizes all the assets we have available.

Tax cuts

I've had several conversations with people about tax cuts recently, and most of them seem to have no idea how tax cuts work. It is my attempt to explain the rational behind tax cuts as I understand it.

Most tax revenues come from money moving through the economy (income tax, sales tax, trade tariffs, etc.). Making this look more simple than it is, the equation might look something like this: T x I= R, where T=tax rates, I=money changing hands in the economy, and R= government revenue. Now, if we want to raise R higher, then we can raise T or I. Everyone agrees we need more tax revenue if we are going to stave off economic collapse

The argument for higher tax rates goes something like this: The best way to raise revenue is to increase tax rates. The money is there, we just need richer people to give more of it to the government so we can continue taking care of the poorer populace. In the short term they are right, raising tax rates will indeed bring in more tax revenue.

The counter argument is more complex because, I think, it takes the real world into consideration. The counter argument states that the way to raise revenues over the long term is to lower tax rates, which will increase the amount of money changing hands in the economy, (lowering T to raise I in the equation above). When you tax something, people will pay the tax until it gets annoying. At that point they will either try to do it somewhere you can't tax it (outsourcing) or as little as possible. The more money we leave in the economy, conservatives argue, the bigger the economy will get. The increase in the size of the economy will off set the reduction in taxes enough to raise the amount of money that is raised through taxes. In the long run, they are right, though tax cuts will not do a whole lot in the short term to help the economy.

With tax increases, people will pay more money to the government. Pulling money out of the economy, through the government, and then putting it back into the economy is terribly inefficient and doesn't do a whole lot.

A lot of companies are taking moving out of the states because it is cheaper to do business abroad than here. Part of that is, I admit, because you can't pay Americans a dollar a day, but neither do they have to pay the Chinese government 35% of their earning in taxes. If tax rates where decreased, a lot of business would return to the U.S. I admit that I am not an economic major or a math genius, but it doesn't take a genius to see the difference between how New York and Texas are weathering the economic crisis. New York has some of the highest tax rates in the nation and they are going bankrupt. Texas has far lower tax rates and we're growing.

To the Young (Like me)

This is primarily for young people, specifically young men. I've done a lot of thinking over the last few months with all the debate about what laws should and should not be passed etc, and I have come up with the solution to most of the ethical issues facing the nation. Young Men.

If young men would take a stand and live for God instead of for self, a pretty large portion of the evil in America would simply vanish. To illustrate my point, consider the following:

Abortion: If young men are only having sex with their wife in marriage, there will be precious few young scared girls getting abortions because they can't take care of themselves and a young child.

Porn and the explicit entertainment industry: It's simple, companies produce what people buy: if it ain't being bought, it will not be made.

Gun Violence: If young men get their focus off themselves they would be less likely to shoot up people they don't think respect them and more likely to minister to those who are in pain.

Bottom line: The Social Evils that everyone is spending so much time and money fighting will not be ended by a law. You cannot pass enough laws to make people good. The solution is hard and slow, something people today don't like. It is not easy to popular to tell people that abortion will not be ended by a Supreme Court decision in ten years but will take at least several decades of people interacting and changing hearts one at a time.

Young men and women are the leaders of tomorrow, as people at college are so fond of saying. If we make the decision that we will make a stand for God, for the right, whatever the cost, whatever the result, God can use us to have an impact far greater than we could ever wish.