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Friday, December 3, 2010

The Simple Understanding of Tax Cuts

With many issues going on not just around the country but around the country, the top one that many in DC are facing right now is extending the Bush-era tax cuts. The Republicans are claiming to be standing against bills until a full tax cut extension bills comes up. Well, the Democrats don't like it and are continuing business as usual, or as usual as DC gets. In fact, the Democrats just passed a bill with middle class tax cuts in it and seems 3 Republicans defected and decided to vote for it. H.R.4853 - Middle Class Tax Relief Act of 2010, passed the House with a 234-188 vote, with Rep. John Duncan (R-TN), Rep. Walter Jones (R-NC), and Rep. Ron Paul (R-TX) voting for it. At the same time, 20 Democrats voted against the bill, many of which are in support of extending tax cuts for everyone.

Now, when it comes to taxes, even the smartest of us have problems. Who wouldn't with a tax code of 16,845 pages, or so the estimated length is. I'm by far no tax wizard but even I know that raising taxes kills an economy. Before we talk about the current tax cuts, let's look at history. In 1835, President Andrew Jackson managed to reduce the debt to only $33,733.05, the lowest it has ever been since the fiscal year of 1791, the year the Bill of Rights was ratified. And President Jackson is the only President in United States history to have paid off the National Debt. How did he do it? Well, he lowered taxes and this increased the tax base. President Jackson and his Secretary of the Treasury, at the time, Levi Woodbury, both favored an "independent" treasury system and "hard money" over paper money. The both understood that raising taxes only makes people more reclusive to pay them and this the government loses revenue. Instead, by lowering taxes, people have more money and are more inclined to pay their taxes and thus the economy thrives and the government can pay off the debt and deficit.

Now back to the present. Yesterday in the House, Rep. Alan Grayson (D-FL), made a mockery of himself by making a last stand against a tax cut for the "high-class". This is the same guy who had a chart stating, "THE REPUBLICANS HEALTH CARE PLAN: 1. DON'T GET SICK". Well, how did he make a mockery this time? Well, he attacked Conservative radio and television hosts, many of which are on Fox News.



Before we continue, we'd just like to thank Rep. Grayson for his stupidity, if you didn't know, he got defeated in the November 2nd elections. Now, what Rep. Grayson isn't getting here is that these radio and television hosts work for their money. Also the fact that with the tax cuts, they aren't making any more money, but simply getting to keep more of what they make. It's called the free market system, getting to keep the fruits of your labor. It's an idea that the Pilgrims learned 390 years ago. When the Pilgrims landed here, they had nothing and the winter was very harsh. In the spring the Indians taught them how to grow corn, fish for cod-fish, and how to skin beavers for coats, but they didn't prosper yet. They had contracts with merchants in England and one agreement was for all the property and products of the Pilgrims work would go into a "community chest". With this idea, people didn't get much and thus lost interest in farming and keep everything nice as they received nothing for their hard labor. William Bradford saw this and as the Governor, he assigned a plot of land to everyone to keep and tend. With these plots, everyone would get to keep the fruits of their labor. At this point the Pilgrims prospered and the Great Puritan Migration began as Europeans heard about the great success in the New World.

The Pilgrims had tried socialism even before it had a name, even before Karl Marx thought of it. But they learned that collectivism doesn't work and that everyone must be able to keep the fruits of their labor. We face the very same issue today. We face a government who believes that the only way to succeed is to tax and they believe this brings in more money. Time and time again throughout history this has been shown to be wrong and that the more people get to keep of their own labor, the more the nation and economy flourish. We have people in DC who wish to make the government a business rather than do it's only purpose, to protect our freedom and liberty. They would rather make millions of dollars than actually help the people the represent. They would rather be corrupt and blind then obey the oath they took to uphold and defend the Constitution of the United States from enemies both foreign and domestic.

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