Fact # 1: US economy runs on after-tax $
We consumers, whether self-employed or on company payrolls, and all US based companies, spend dollars that are left over after we pay taxes and withholdings. For companies, dollars available for spending are after accruals for taxes are funded. So after-tax dollars drive economic activity, stimulating growth when taxes are low, or having less impact when taxes are high.
Fact # 2: Everything we consumers do with dollars creates jobs
When we shop, dine out, or travel, we create/sustain jobs. If we save and/or invest, those dollars are used in the economy, also adding to activity and job creation.
Fact #3: We consumers pay all taxes
When a retailer such as Sears or Home Depot or a manufacturer such as Ford or GE writes a check to pay taxes, where did the dollars come from? We consumers are the end users of products and services across our economy, so the final coverage of taxes is funded by us. What happens when taxes on people or companies are increased? Costs of goods and services rise, and we get less economic activity. So if consumers need more dollars to move the economy toward greater growth, where do we stand?
Per the chart, the biggest item in the family budget is funding the government. This relationship is upside down! Shouldn’t the family budget be spending $4T or $5T on housing, food and clothing, and the government manages its needs on $4.3T or less? If we the people are the drivers of the US economy based upon our spending, we need more dollars! Instead, we live under a regime that governs too much, taxes and regulates too much, and constantly intrudes into our lives. How do we get lower cost government? Let’s vote in November!
The opinions expressed in this commentary are solely those of the author and are not not necessarily either shared or endorsed by iPatriot.com.