Saturday, February 6, 2010

"PEOPLE PAY TAXES"

I am watching with interest to see if President Obama's idea of increasing taxes on banks becomes a reality. It is too bad that presidents and elected officials are not required to be at least a little proficient in basic economic principles because the current group of politicians don't seem to have much of a clue. For example, if you want to reduce overall employment and real economic production of goods and services; just increase taxes. A tax on banks will just increase the costs of getting a loan from the banks as they will pass along any increased costs. Every business has a partner; Uncle Sam, who gets a slice of any business profits. Why would Uncle Sam want to increase taxes on banks when this will reduce lending and thus investment by businesses in investing in both capital goods and hiring more people?

It may be popular to try to play the "politics of envy" by "taxing the rich" or just wanting to "spread the money around" as the socialistic liberals of the day seem to want to do. The reality is that "people pay taxes" not corporations because any corporate tax is factored into the cost of the goods and services produced. I would rather there be less regulation and governmental influence in the economy as this would create a more productive environment for economic activity.

With a government out of control as we currently have today where the current president proposes a budget that has a deficit of 1.6 TRILLION DOLLARS in one year and then has the audacity to proclaim that he is for fiscal responsibility and prudent governmental spending only in some sort of "bizarro world" can this be believable.

The current president is now supposedly focused on creating jobs as his health care efforts are hopefully put to rest. President Obama has a "jobs summit" but potential job creators were not invited. Here's a thought, why don't we get the president and the Democratic congress to sign the trade agreements with Columbia, South Korea, and other nations? We live in an international competitive economic world and other nations are signing trade agreements and taking away markets from American businesses. I remember when the unemployment rate under President Bush soared to 5.3% and speaker Nancy Pelosi was bemoaning about how this was a sign of a deep recession; now we have an unemployment rate hovering around 10% with an underemployment rate of approximately 17% with plenty of unemployed people becoming discouraged and giving up their quest for a job. The federal budget deficit is way higher now than under the President Bush years.

Yes, in the end, "people pay the taxes" not banks or corporations.