Re: are we all paying too much in tax
Djohns,<br /><br />While that may be true that revenue tripled in the 80's with tax cuts (Why then did Reagan institute tax increases I wonder in the latter part of his administration? Oh, well), all of the projections done by this administration and the OMB that they control suggest that with the current proposed tax cut, deficits are going to go thru the roof. Clearly they have so far under this administration at a rate far faster than they projected so far, so I take them at least at their word, and worry that they will be worse than expected.<br /><br />Tax cuts can indeed increase revenue-no argument from me at all- but they need to increase economic activity in order to do so. To the extent that they do, they will work. However, if they do not stimulate increased economic activity, they lead to less revenue to the government, and higher deficits.<br /><br />The other method government uses to stimulate the economy is trade policy. It is why I would argue that something like NAFTA has been a huge boon to this country. In theory, each country does some things well, and very economically, while it does other things less well. If free trade allows goods and services a free flow, and all take advantage of each others particular skills, it is the proverbial tide that lifts all boats.<br /><br />During the 90's when NAFTA was introduced, it was a factor that led to unprecedented growth and unprecedented low unemployment. On top of that, if other countries improve and expand their own economy by trade to the US, they become better customers of the US for the products we do well, and it helps all. On top of that, a country that expands its standard of living usually is always less a problem in the foreign policy realm.<br /><br />This country could do so much more if it resorted more to economic aid, both in the form of money and advice, than it will ever do with bombs and military force.<br /><br />Unfortunately, for whatever reason, this administration has reversed much of the trade policy, and we now have tariffs on things like steel, ostensibly to protect steel producers. It doesn't, as the new "minimills" located in this country are already competitive, and the old antiquated mills no amount of tariff is going to help.<br />We also have a huge tariff on softwood lumber coming in from Canada, (roughly 33%, although it varies a bit from one co to another) which tends to add a significant amount to the consumer in terms of the cost of a home, and yet helps only a few large timber and mill companies. <br />There are more tariffs, such as those on sugar, and I even got a note from my senator suggesting she was pushing to add a tariff on South African peaches, of all things, to help Washington peach growers!<br />All of these tariffs go specifically counter to improving our economy, no matter what the labor unions tell us.<br /><br />However, government can do a lot to affect the economy, and economics is a complex thing that sometimes takes time to take effect. It takes doing the right thing at the right time to have the desired effect, however. So far what has done has had a predictable effect. Perhaps with a new team in place, there will be some new ideas??
