Thursday, September 18, 2008
Death & Taxes
Well, forget about the death part of my title, I thought just plain, old "Taxes" sounded ultra-boring.
Today's little post is about, surprise surprise, our upcoming election. I thought I'd give a little insight to what lower taxes means as a whole to our country.
I recently was talking to a certain family member about this exact subject and his/her (this is to protect the innocent, or not-so-innocent...you know who you are!) take on receiving lower taxes was this....it's not going to amount to a hill of beans to me personally (this may not be verbatim but it's what I took away from the conversation). This person truly thought that the lowering of THEIR taxes didn't seem like a big deal in the scope of things. So, in true Amii fashion, let's take a look at what lower taxes for our country will mean as a WHOLE. I am NOT an economist, although I did want to be one at a particular time in my life (I LOVED my economics classes a lot) but I understand basics of how economics works and I'm also pretty much someone who is logical. Logical economics...it almost sounds contradictory to our current situation here in the US!!
1) Lower taxes mean that each individuals/families will have a greater NET worth because they will have more money in their pockets after taxes.
2) Said money allows you to do one of two things (or both)....Spend it or Save it
3) Said "saved" money gives you greater peace-of-mind about your future...you now can save up that money for a house, a car or your child's education, without feeling much of a crunch because you technically just got a raise due to your lower income taxes. (Here's a little secret though...the government really doesn't want you to save it, they want you to....see number 4.)
4) Said "spending" money allows just that...for you to spend it. So let's look at the bigger picture of you spending your extra net pay money.
When YOU go to the store and buy, let's say, a new TV because you have that extra income money (from lower taxes) you think that it is only benefiting you, right? WRONG...if you have extra money and you are spending it, don't you think that at least SOME of the other 300 million plus people in the US are doing exactly the same thing?
So let's look at it this way...let's say 150 million Americans, due to their greater NET (by the way, see below for what this means if you don't already know) worth buy the same $1000 television that they wouldn't have bought unless they had that extra take-home pay. Did you know that all of a sudden, the sales of 150 million TV's just added to our growth in our economy? The more money spent within our economy means that there is prosperity. Prosperity means that all of a sudden there is higher demand of "stuff " (ie, cars, houses, sweaters, ring pops, whatever). Higher demand means more jobs. More jobs means lower jobless rate. Lower jobless rate means less welfare applicants. Less welfare applicants means less tax burden on Americans. The more money that is pumped into our economy also means that we are digging ourselves out of our nation's ridiculous deficit.
Look at it this way....let's say 100 million Americans each made $50,000 (called your GROSS income) with a 30% tax rate. So, if you were to look at it by an hourly rate, you think you're making about $24.00 per hour (if you work 40 hours a week/52 weeks a year). WRONG. When you deduct the 30% tax rate from your GROSS income of $50,000, you get your NET income of only $35,000. Sadly it's the way taxes work (but let me re-iterate that I do believe that some taxes are necessary for such things, since our country as a whole benefits from it, as our national defense...that's the only way we have the military). So now you don't make approximately $24.00 per hour, you really make about $17.00 per hour. So what if tax rates dropped 5%? Well your net worth will be $2500 more per year than it was before. Doesn't sound like that's much to make a difference? Well, let's look at the big picture again with 100 million other Americans making $2500 more per year in their NET pay. If you calculate that up, it equates to about $2.5 billion MORE money per year that our country has as spendable money. And that's only if everything were exactly as my above example.
So to summarize, lower taxes may not "amount to a hill of beans" to you but as a whole it means A LOT to our nation. Next we're going to talk about our energy crisis and what it means to me and how I think McCain/Palin WILL be the go-to people on this subject when they get elected.
Vote McCain/Palin for President and Vice-President!
Oh and by the way, to those that don't like Sarah Palin, my personal feelings are that you, subconsciously, don't like her because she's pretty and smart. Quit being jealous...I'll vote in a smart, beautiful woman, particularly Sarah Palin. Oh and I would way rather have a mother of 5 in the office any day of the week. If you are a mother, you know what I mean! Way to be both smart and pretty, Mrs. Palin! Lord help us should we have ever had manly dictator like Hilary voted in!