Lessons for the week

A real live person asked me how tax cuts would benefit anyone other than the rich and how it would keep tax money flowing to the government so they could keep programs open. Deciding to let the "Massive cuts in government" argument go for the day I attempted to show him in a very simple and easy to understand way. This person works in the restaurant industry so I used that industry as the example. Here is what I told him.

(All names have been changed to protect the innocent and the not so innocent)

Joe owns a successful restaurant in Memphis and wants to expand his business into two different cities. Joe pays $15 in taxes for each location he has. If he opened both he would have $30 in new taxes and that is too much so he will only be able to open one. He opens one and has to hire 10 people to work in his new restaurant. They all pay $1 in taxes. By staying the same we have 1 new company, 10 new jobs and $25 in new tax money.

Now

Let's cut Joe's taxes to $10 per club. Now he CAN afford to open both new locations. $30 was too much, but $20 is just under the max he could afford. Now he has to staff those two clubs. The same rules apply and he needs to hire 10 people at each new club. Now do the math. We have 20 new jobs and $40 in new tax money.

By cutting corporate taxes, the government would allow people like Joe to go out and grow their business. New Jobs are created and the economy gets back on it's feet.

EVEN WITH THIS.....There were questions.

Q) Who's to say that all companies do this?

A) Nothing. But successful companies and businesses are always looking to grow. They do this through good investments and good business decisions. Use either of those two in a sentence with the word government. Some will not expand. They may take the extra tax cuts and pay off debt they got into with the high taxes. Guess What....That's good as well. Some will, some won't the point is that a free market will work better than government "Asset Redistribution"

Q) What about those 20 people that didn't get a cut in their taxes. Joe got his lowered by $5 and they still pay $1.

A) Correct all we did was cut the corporate tax rate. The individual still pays the same amount. BUT 20 people now have a job and can provide for their family. Paying $1 in taxes and having a job is better than paying no taxes and not having a job.

Of course the usual questions and statements about past administration and past spending and the war and global cooling and oil and cars that run on baby farts and elfkin tears all came up as well. But I try not to bite off more than I can chew. We'll just start small. I have given up on the idiots in Washington that forgot they work for us and not over us. I am focusing on a local level.