Rethinking the Bush Tax Cuts
“Extending the Bush tax cuts to those making over $200,000 over the next two years would cost us $700 billion. These cuts affect only the top 2% of the population, people who can well afford to see their taxes rise from 35% to 39.6%,” writes the editor of Bank Investment Consultant, Pamela Black, in her September 10, 2010 column.
Pastor Dan Penn was the chaplain for the Dallas Cowboys during Roger Staubach’s reign. The Pastor and Staubach were having breakfast together and Penn speculated that given a star quarterback’s income, he couldn’t possibly havve financial worries, to which Staubach responded, “I just write bigger checks.”
Staubach’s story illustrates that those with higher incomes still spend similar percentages compared to the less wealthy; albeit their mortgages are bigger, their car payments is bigger and they take more exotic vacations. On the one hand, that’s the stated goal of the stimulus money – to push the economy off its stalemate through spending. America needs people spending. Economists say a healthy economy has a high “velocity of money,” the rate at which it changes hands. Your boss or client pays you, and you spend it on dinner. The restaurant buys food, the grocer takes his kids…
To read more visit http://www.watchboom.com/index.php/articles/rethinking_the_bush_tax_cuts/