The Benefits of Tax Cuts

It was the great founder Benjamin Franklin that said, “In this world nothing is certain but death and taxes.” Mr. Franklin knew exactly what he was saying and this is definitely the feeling of most Americans today, some more than others. Many say, “Tax the rich and give to the poor!” This is not what our founders had in mind when this country was constructed. America was founded on the basis of capitalism and taxes do nothing but hinder business as it strives to move forward. No president knew this better than Ronald Reagan. Reagan knew that cutting taxes was more beneficial to businesses because this removes unnecessary burdens from them and allows them to flourish.

Liberals prefer to insure equality of outcome rather than equality of opportunity. Liberals have a tendency to love government spending. However, this increases the national debt. How do they plan to pay for this? They plan to do this by taxing the successful. The Obama administration ran on the basis of “spreading the wealth”, as most Liberals like the idea of. “Raise the taxes on those that make $250,000 or more!” was his cry. The Liberals like the idea of “bridging the inequality gap” and allowing more government control over the aspects of private enterprise. This “gap” is bridged by taking money from those that work hard to make a living and giving to others that do not. This is dangerous and harmful to the idea that all should possess what our founders believed we deserve, namely “The right to life, liberty, and property.”

I strongly disagree with this idea of “spreading the wealth” amongst all. This principle is extremely unfair to the one that worked hard for all the money he earned (regardless of how much). Think on this: Suppose we are in a class together and I am one of the laziest students in the class. I make Fs on all my tests, do not do any homework, and I do not participate in any class projects. You, however, are the epitome of a great student. You make As on the tests, do all your homework, and your class projects are flawless. On the last day of class, the professor approaches the class and says, “I’ve decided to do things differently. Many of you have done well in this class, but there are many on the other end of the spectrum, as well. To be fair to all, I’ve given everyone in the class a C.” If I were you, I would be enraged, and you would have a right to be. You would not work near as hard next time, for you would have no reward in doing so. The same principle applies to all these people that work hard for a living, only to pay another’s way. These people that work to make an honest living would not desire to work hard anymore, for in giving one’s earnings to another for nothing, you destroy the incentive to work on both sides. This is sad, but it is what the leaders of this administration are trying to accomplish.

We should note that Conservatives like the idea of laissez faire economics in which the government should leave the market alone and let the problems work themselves out. They favor tax cuts for businesses, which allow businesses to be more profitable and create more jobs, thus creating a greater revenue base. Reagan knew our economy was based on the law of supply and demand and that individuals had the right to choose their line of work. If one person opens a business and it flourishes, then the government should not tax that business to death. Taxes on businesses as a whole destroy the incentive to work and shred our capitalistic values until there is nothing left but empty buildings with “For Sale” signs in the front window.

One should see that tax cuts are profitable for businesses. Reagan cut the top marginal tax rate for individuals by over 50% after taking office. Revenues fell at first, but over the next eight years of his presidency the revenue doubled. Higher taxes, especially on smaller businesses, discourage investing in equipment and opening new plants, resulting in no job creation. Lower taxes allow businesses to retain more profit and invest more money in the business, as any good business owner would do. President Reagan would support lower taxes on the sector of our economy that consistently creates the most jobs: small business.

See what Mr. Reagan says on capitalism and socialism here: http://www.youtube.com/watch?v=8gIxuOabGBE.


I have to say I agree wholeheartedly with the Mr. Reagan on this one, as I do most other things, for the Liberal ideals make absolutely no sense. We need to listen to the Conservatives and tax consumption rather than production. In doing so, we would open many more options for business expansion and create jobs. The founders did not tax those that produced goods; one simply gave them the tax money on the things they consumed. It seems that a flat sales tax is the fairest way to go, for this would force the government to live inside their means, which they should be doing all along.

In conclusion, cutting taxes for businesses removes many unnecessary burdens and allows them to invest more money in their business. Not only that, it creates a greater source of revenue, because the more people there are employed, the more revenue there is coming in. Ibn Khaldoon, a Muslim philosopher, said, “At the beginning of the dynasty taxation yields a large revenue from small assessments. At the end of the dynasty, taxation yields a small revenue from large assessments.” This is saying, when rates are low, revenue is great; when rates are high, revenue is low. We need to use the Conservative ideals and apply these to our economy. In doing so, the economy will flourish, as it has done in past Conservative administrations. American businesses would also be more profitable, resulting in a happier American citizenry.