[Contrary to the Watchdog’s contention], The Republican leadership has not been arguing for revenue-sharing to pump funds into the economy. They’ve been arguing for tax cuts—as if the unemployed would benefit much from paying taxes at a lower rate on income they haven’t got jobs to earn.
It’s not clear that tax cuts are what we need. We got into this mess from running massive deficits. When the dollar lost value, oil-producing countries jacked up the price of oil to compensate, and when gas prices skyrocketed, people no longer had the income to pay for the mortgages on their McMansions located far from their jobs in new developments where land was cheap.
We already have some of the lowest taxes in a century. Ronald Reagan, facing economic problems early in his first term, concluded that he’d lowered taxes too much, even though they were higher than our current taxes. He fought his own party to raise taxes and the economy recovered. The prosperity of the later 1950s followed a recession earlier in the 1950s. Ike gave us the IRS Code of 1954, which established a top tax rate 2.5 times as high as today’s top income tax bracket. A coincidence? I don’t think so.
It’s small business that creates jobs, not big business, and working men need to a reasonably good income to accumulate the minimal funds to start a new business. Our current tax structure, which leads to greater disparity between lower income and high income jobs, makes it more difficult to start small businesses, leading to today’s economic monoculture of franchises and chains instead of independent small businesses.
