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Sunday, September 30, 2007

Clinton to raise taxes

I read an article today at www.nysun.com titled "Clinton's Big Tax Hike: Senator Eyes a shared Prosperity" By Russell Burman.

This article discussed Hilary Clinton's proposal to raise taxes on higher income Americans as well as eliminate some of the other tax breaks used by corporations if she is elected. She believes that government should have a bigger role in the lives of Americans then it does today. This expanded role of government is meant to aid in the idea of having "shared prosperity" among society. Clinton assesses that there needs to be a change from the way wealthy corporations benefit at the cost of the middle class. Clinton says that she prefers a "we're all in it together" society. The way she plans to accomplish this is by cutting subsidies for oil and gas companies, as well as making them invest in alternative energy or pay into a national research fund. Among other things Clinton would subject the salaries of chief executives to greater scrutiny. This would be her fix to what she called president bush's "irresponsible tax cuts". Hilary Clinton's proposed policies were of course immediately scrutinized by some of the leading republican presidential candidates. Some Republican spokesman believe that under these types of changes the economy would slow, job growth would be halted, and American business would become less competitive. Clinton says that she does understand the the economy has grown under president Bush but it is not the kind of growth that makes a difference in households and with families. Clinton states "Its like trickle-down economics, but without the trickle". As she puts it there is a widening of the gap in income between the lowest and the highest earners. Her policies are intended to spread the wealth among all socioeconomic classes.

I do not believe that the pursuit of a"shared prosperity" society and an expanded role of government is the way to go. Competition is what drives an economy to grow and prosper. What would drive competitiveness if there is no reward? Why work hard and produce a lot when you could sit back and let someone else do the work for you and "share" their wealth?

I wonder if a flat tax which every income earner paid would bit, in principle, the idea of "we're all in it together"?

As you will see when we turn to taxes as the topic for our course, many people pay no income tax. Can you "be in it" if you aren't paying taxes?
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