Lower income Taxes Can de facto increase Government income

--Tax Brackets 2010 of Lower income Taxes Can de facto increase Government income--

here Lower income Taxes Can de facto increase Government income

It sounds backwards to many people. But those with a good understanding of free shop economics have a good grasp on this very foremost fact. Historically speaking, every time we've cut taxes in this country, we've commonly wind up doubling, or tripling the "expected" tax revenues.

Lower income Taxes Can de facto increase Government income

Why does this happen? First, we need to understand exactly what wage taxes do. As you earn your wages, a portion of that wage is given to the government. As your wages go up, so does your tax rate. This is called a progressive tax rate, but not exactly the focus point of today's article, I will cover that in detail at a later date.

It is commonly known that taxing an performance commonly results in less of that activity. Case in point: Obama said that he wants to raise taxes on those Americans manufacture 0,000/yr or higher. So, what do the people manufacture 0,000/yr do? They find ways to sell out that wage to below 0,000. Keeping them in the lower tax bracket, and resulting in less wage for the government.

That is an incentive to lower your own income. And it is a excellent one. However, a lower tax rate for every person would allow people to keep more of their own money. Then, what do you think they'll do with it? Spend it on new toys, possibly enlarge their businesses, buy new cars, etc. And what happens when those things happen? The people manufacture the toys touch higher ask for their toys, so they must increase production. Same with the car manufacturers. And then? Well, now they are spending more money in this economy, creating jobs, thus getting more people paying taxes.

And then, tax wage for the government begins to rise, since while people are paying less ration wise, there are more people working, and paying taxes.

But that still leaves a problem. It's still a progressive, scaled tax system. It's not a fair tax law at all. Oh, sure, it's "fair" to those who don't have to pay taxes, but that's not exactly fair, now is it.

Here is my "fairness" litmus test. Will you swap what you have now, with what the other person has, and still say it's fair? Or, will those Americans who pay an wage tax rate of 0% now, still think it's fair when they are paying 30%, and their boss is paying 0%? Not likely.

Enter, The Fair Tax Act of 2010. It's basically another endeavor to pass the Fair Tax system. This wholly replaces All payroll taxes; wage tax, group protection tax, etc, with a single tax law that taxes consumption, instead of income.

Implementing that tax structure would be the best thing to happen to our cheaper since the steam engine.

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