Lower Taxes = More Government Revenue
By Bill Lussenheide
Candidate US Congress CA-45
On our income we pay Social Security taxes, workers compensation taxes, State taxes, Federal taxes and more. There are capital gains taxes, dividend taxes and inheritance taxes.
In my home state there are sales taxes, property taxes, and well over 100 other types of taxes levied on a wide variety of goods and services.
In total, on average, regardless of what state you live in, government takes more than HALF of your income from you in some form of direct or indirect taxation. Amazingly, our nation went to war with England at what started with a tax on stamps and paper! We are well beyond just taxing stamps and paper.
But some would offer the concept that government really does need that money. I would argue strongly against that idea, as the growth of government always leads to a loss of freedom.
But lets suppose for a minute that I actually was a fan of the government receiving more revenue. The pragmatic answer to that problem would be the following… TAX LESS and HAVE MORE GOVERNMENT REVENUE!
I know it sounds insane at first, but the economic truth is out there for anyone to find. World-renowned economist Art Laffer in his landmark economic research has demonstrated conclusively that lower tax rates actually improve government revenue by expanding and simplifying the economy. In his research, using a methodology called the “Laffer Curve” , it is shown that the sweet spot for total taxation is just 20% of economic output. That’s it, just 20%.
The rationale can be explained fairly simply. Somewhere in the sliding scale of 1% to 100% is the percentage that will produce the highest government revenue. When you realize that if you taxed everyone at 100% that no one would work, and that the higher you tax you discourage production or a move economic activity into the underground economy, you start to see the point. According to Laffer, and other economists, 20% of GDP would produce the highest possible revenue for the government, and would stimulate the economy to expand. This as a result of the overall lowering of the tax rates.
When John Kennedy and Ronald Reagan drastically cut tax rates during the administrations, government revenue greatly expanded, nearly doubling in 10 years.
To have 50% or more of our income to pay for government is not only an onerous burden…it is counterproductive! The answer to our budget and economic woes to grow our way out of it, not “Kill the goose that laid the Golden Egg!”
I will argue against Federal Taxation as an unconstitutional provision on some other day, but common and economic fact remains true…lowering of taxes will grow both government revenue and grow the economy.
As your Congressman, I will battle against tax hikes, and will work always towards lowering taxation and the size of government.