Originally Posted by theonlybiker111
maybe this will interest you.
taxes are too high?
gee.. they have been way higher.
only 6 yrs ago...
so. deficit goes up, taxes go down? doesn't make sense does it
oh yes it does.
so, we tax, we get out of debt.
it works in the personal finance realm.
if I make more money, I get out of debt.
here's the tax rates in the past .
if you're a history buff, you might want to correlate tax rates to what was happening at the time.
quite eye opening.
tax rates from 1913-2008
Makes a lot of sense when spending is increased.
Your view is one of a wage-earner, however your long term wealth will not come from wages, but from capital investments, if you are smart.
As a wager, you have no control over the frequency and amount of the flow of money into your pocket, so your tax liability is also not controllable. As you earn it, they tax it.
When you own capital items, stocks, bonds, real estate, whatever, you can control the frequency and timing of buying and selling. Taxes are only accrued when you decide to sell. Let's assume you have a sizeable gain on an asset. Tell me whether you would prefer to sell when the tax rate is high or low? How would your decision be affected if you knew that the tax rate was going to be raised soon? What effect would that have on tax collections for the government?
Now think about if you decided to open your own business as a corporation. You carefully detailed your income and expense projections and determine that your bottomline shows that you can just replace your salary plus a return on your financial investment. You then discover that a proposed corporate tax increase will wipe out the return on your money invested. You are then back to starting a business that will only replace your salary. Why would you do that, risking your money, security, free time to break even or worse. Corporate taxation discourages investment and capital risk.