Your statement that the first income tax was instituted for fear of the spread of Marxist ideas is totally false. Income tax was initially brought about to finance war. That was also the driving reason behind the prohibitively high margin rates in 1917 and in 1945. It had absolutely nothing to do with Marxism, Socialism, or anything other than trying to pay bills. For all the crap Reaganomics absorbed, the JEC found his ideas on increased/decreased taxation to be on the money. In essence:
High marginal tax rates discourage work effort, saving, and investment, and promote tax avoidance and tax evasion. A reduction in high marginal tax rates would boost long term economic growth, and reduce the attractiveness of tax shelters and other forms of tax avoidance. The economic benefits of ERTA were summarized by President Clinton's Council of Economic Advisers in 1994: "It is undeniable that the sharp reduction in taxes in the early 1980s was a strong impetus to economic growth." Unfortunately, the Council could not bring itself to acknowledge the counterproductive effects high marginal tax rates can have upon taxpayer behavior and tax avoidance activities
With regards to our current tax system, it may simply need an additional tier to reflect the earnings of the super rich. I favor a flat tax with no exemptions and three levels. Estate taxes also suck the life out of people.
Without being an isolationist, I admit to being a protectionist. Manufacturing in this country faces major disadvantages in competing with Mexico, China, and any third world county. First, China subsidizes materials used and energy used. They also manipulate the currency to control their advantage. Next, labor is only 10% (or less) of what it is here. Considering labor makes up half of my overhead, that's one hell of an advantage. Next, I have to give benefits and have insurances of all types that China doesn't. On top of that, they have no environmental controls, whatsoever. I ask you: How can I, or any other manufacturer compete against that?
What gets me angry is that people like you have no problem putting the burden on people like me while letting big business of the hook because its easier to tax than to come up with new ideas and implement them. Actually, that isn't true. It really comes down to China being heavily invested in the US and having so much clout we have to kiss their ass.
Everything...and I mean EVERYTHING comes down to one word. JOBS. I'm not talking about Walmart, Kmart, or the type of temporary jobs that politicians always tout and brag about as the jobs they created. For every decent job dollar we bring back, we reduce our entitlement dollars. Are you aware we are looking trillions of dollars in entitlement deficits over the next several years? That's right..TRILLIONS..in entitlement commitments, only. Things need to change NOW. Start with the hard stuff like reducing Gov't salaries and pensions at all levels. Bring them in line with the private sector. Same with teachers and administrators. Institute a tariff on foreign products that will make us competitive here. Demand more equalized trade. Put caps on essential services such as education, medical, and pharmaceutical. We need to stop trying to screw with the "haves" as they help the rest of us. If they bail, too, we are screwed, and that is exactly what will happen if we keep taking from them.
