Not A Laffer
August 4th, 2010 categories: Rants & Riffs
Sorry to be political, but taxes directly and indirectly impact owners of Honolulu real estate. Since it looks like the Obama administration and Congress are going to allow our taxes to increase on January 1, 2011, I feel it is my duty to make my opposition known. In past posts, I have quoted the economist Arthur Laffer and today I quote his post at the Wall Street Journal online. Laffer starts his article with the following.
“Tax reduction thus sets off a process that can bring gains for everyone, gains won by marshalling resources that would otherwise stand idle—workers without jobs and farm and factory capacity without markets. Yet many taxpayers seemed prepared to deny the nation the fruits of tax reduction because they question the financial soundness of reducing taxes when the federal budget is already in deficit. Let me make clear why, in today’s economy, fiscal prudence and responsibility call for tax reduction even if it temporarily enlarged the federal deficit—why reducing taxes is the best way open to us to increase revenues.”—President John F. Kennedy,
Economic Report of the President, January 1963
President Kennedy understood that tax cuts spur the economy and leads to more money going to the government. Here is what I think he knew. 39.6% of $100 is $39.60. 25% of $200 is $50. By lowering taxes, economic activity grows and the taxable pie grows, thus a lower tax rate means more tax dollars for the feds. Our nation doesn’t have problem with have to little in the way of taxes, our problem is that we have a bunch of drunken sailors in Washington, DC, that are spending geometrically more money than they have.
Laffer writes the following.
“Anyone who is familiar with the historical data available from the IRS knows full well that raising income tax rates on the top 1% of income earners will most likely reduce the direct tax receipts from the now higher taxed income—even without considering the secondary tax revenue effects, all of which will be negative. And who on Earth wants higher tax rates on anyone if it means larger deficits?” CLICK HERE TO READ THE ENTIRE ARTICLE
In summary, its not too late, let your Senator, Congressman and the President know that they need to stop spending and to not allow our taxes to be increased in 2011.
If you would like to discuss your real estate needs, feel free to call me at 808-737-2093 or toll free at 877-737-2093. You can email me at keahi@lava.net.
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