Thursday, November 6, 2008
Bottom up or top down?
Obama has declared his intention to pursue a 'bottom up' approach to the economy. It is his theory that by giving gov't checks to people you will spur consumption and invigorate the economy. Of course that money you are giving away was extracted from the economy (or borrowed from a future economy), so there is no net gain. This is the same approach tried repeatedly with the various 'stimulus packages', which spend huge sums of borrowed money for a temporary increase in demand. In actuality, much of the money goes to pay of existing debt and does not increase demand at all. The Republican approach is to cut taxes, specifically capital gains and corporate income taxes. The ideal way to spur the economy would be to set those tax rates to zero, permanently. Of course Democrats will scream and oppose this plan, so I propose an experiment. Let's set those taxes to zero in Texas, and set them to Obama's preferred level of 41% in New York. What do you suppose will happen? Let me tell you. The real estate market in Texas will explode. Tens of millions of high net worth investors will suddenly become Longhorn or Aggie fans. Every business in America will try to relocate to Texas. The extra 35% of their profit that they keep will help them to lower prices and expand production, driving their higher taxed competition out of business. Meanwhile, New York will be a very quiet, lonely place. So tell me, why are we surprised that companies are moving overseas under our current rules? And why can't Obama understand this?
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Surprisingly, despite their professed hatred of leaches it seems neocons really only dislike poor leaches; they adore *rich* leaches. Neocons want nothing more than a country full of wealthy leaches who contribute nothing but thrive on the sweat of working people.
So I agree with your proposal...let all of the leaches go to Texas where they will pay no taxes, drop the minimum wage to nothing, and eliminate support for education, science, the arts, environmental protection, and all of the other liberal ills.
In New York, raise the top marginal tax rate a few percent and offer top schools, parks, facilities, and top it off with progressive policies that will draw artists, actors, scientists and the rest of the educated.
After a few years, which state do you suppose you'd like to live in...if you said Texas, you might as well move there now because their policies have been similar for the last 10-15 years...and look what it's brought them...bottom of the barrel schools, an impoverished population fighting with undocumented aliens for minimum wage jobs...and all that despite having oil!
Somehow, New York, with its high taxes and liberal policies is still considered one of the most desirable places to live with extremely high real-estate values (even in a down-turn), thriving culture, top schools, beautiful parks, etc.
Go figure...
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