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Economic Philosophy

posted November 8, 2008 - 10:44pm
Economic Philosophy

I was having a debate with a friend of mine about the two opposing economic philosophies of the democrats and republicans. She posed an excellent question:

"I see that giving tax breaks to big business allows them to furnish jobs for the middle class. I don't know about you, but I don't think I could live off my tax breaks, I would still need my middle class 9-5 job."

Here's my take on it...

The big debate over economic philosophy is whether prosperity should flow from the top down (trickle down economics) or from the bottom up. By giving money back to the poor and the middle class (which makes up the majority of our population), think about how much buying power that creates. That buying power in turn helps businesses prosper, which then helps those businesses grow and create new jobs. Right now businesses are suffering because the middle class (again, the majority of their customers) don't have the money to spend on their goods and services.The majority of a business's money comes from its customers, not tax breaks. Just as you said you can't live off tax breaks, big corporations don't live and die by tax breaks either. Sure tax breaks for corporations could result in more jobs, but primarily what fuels a business's growth and expansion is increased sales/profits.



Comments

You can't increase sales and

You can't increase sales and profits by giving some people $500 - 1000 once a year in the form of a tax refund. Increasing taxes on businesses leads to two things - cuts in overhead and an increase in prices. If businesses have more money, they can invest in more capital, including human capital (in the form of added workforce, raises, and benefits). So what's the solution? Decrease the taxes for everyone. It's time that the government does with less...not the People. There's no reason for us to assume a false dilemma. We can all benefit from lower taxes and smaller government. *If you're interested in reading my articles, Click Here.

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