Some people have a hard time getting their minds around the idea that a tax cut actually generates more revenue than had the cut not been enacted. This seems counterintuitive to many folks, and they fear that if congress cuts taxes government will have less money to do the things it needs to do and will have to go deeper into debt to pay its bills.
This is why some people are upset with President Bush's tax cuts. They see it as reducing the government's revenue and ability to meet the needs of people in want.
The principle behind tax cuts, however, is that the more money you can keep in your pocket the more you'll spend or invest. Either way you're pumping money into the economy which means businesses prosper and can hire more workers. The more people working the more taxpayers there are and therefore the more revenue that comes into the federal coffers.
Does it work? It always has and it is now, as this article suggests:
The U.S. government recorded record-high overall and corporate tax receipts on Sept. 15, which was a quarterly deadline for tax payments, the Treasury said Monday. Total tax receipts were $85.8 billion on Friday, compared with the previous one-day record of $71 billion on Sept. 15 of last year, the Treasury said.
When people complain about tax cuts they should be asked what it is they want taxes to do. Do they wish to keep taxes high simply to punish people who have wealth or do they want to increase the revenue flowing into the treasury. If it's the latter, and that's the only moral justification for high taxes based upon income, then it's getting pretty clear that they should favor reducing the tax burden on people so that they can generate more wealth and more revenue.
