COMMENTARY | Surely, most Americans like the sound of the 2 percent payroll tax cut. But is Obama's strategy to re-invigorate the economy going to stimulate job growth? Or, as Reuters tells us, will those businesses losing dozens of tax breaks simply choose to make their employees increase productivity for the same rate of pay and pass increased prices on to consumers? While the president may be jockeying for re-election with an ear-tickling tax cut, it could still cost him his job.
In an interview with NewsMax.com, Representative Jim Jordan R-Ohio accuses President Obama of offering America nothing more than "more taxes, more spending, more failure." The implication being America is heading for the same type of debt crisis which Greece is suffering through now.
Representative Jordan says, "Three months ago, we crossed a line you never want to cross -- our debt to GDP ratio is now one to one. We have a $16 trillion debt. We have a $15 trillion to $16 trillion annual economy. Whenever you get in that area, that's the danger zone. That's exactly where Greece was, that's where Italy is, that's where so many countries in Europe that are having problems are. And now, the greatest country ever is in the same position."
Although I'm not a Republican, I find myself agreeing with conservative voices on the president's approach to spending. Our economy is one designed for a free market. In order for a "big government" approach to bring a solution for our economic difficulties, we'd have to make a massive paradigm change to business-as-usual in our country. In a socialist country, big, strong government is a good thing. In an economy based on free-market principles, a big, strong government is the problem.
Captains of industry in the United States enjoy tax breaks because they're the job creators of a capitalist society. Their investments generate sales tax revenues from other industries, create job growth itself and ultimately, said companies' profits also provide tax revenue to the government itself. Those business-people who create the jobs are the life-blood of the economy. The Obama Administration has a wonderful grasp of some major social issues. But when it comes to the economy, he fails to understand American government has one primary role in business -- take it easy on the businesses of our economy.
As a final point -- one which few tax-happy bureaucrats like President Obama will ever share with the common man -- While lowering the average American's payroll taxes sounds good on the surface, the benefit is voided if businesses are also required to pay higher taxes. Businesses don't pay taxes. Their customers do. All expenses for operations are factored into the price of products and services paid for by the consumer, in one way or another. This plan of Obama's could backfire.
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