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Dear John… (Page 2)
2. I said I would get back to tax policy. I understand the fears about cutting taxes with the current deficits. But their are a few facts that I think are not being considered. First item is that tax rates are not the measure with which we should concern ourselves. It is tax revenues that really matter. This was evident in the tax cuts passed in 2003. The economy was in recession and jobs were being lost. We has lost over 500billion in revenue in 2001 and 2002 and continued to trend downward. After the tax cuts this trend was reversed and revenues increased. We gained back that 500billion in losses and are now have well over a trillion dollars more revenue then we would have had without those tax cuts. It bears repeating, we have INCREASED REVENUE to the federal government by over ONE TRILLION dollars since those tax cuts were put in place four years ago. This can be easily confirmed by the IRS’s own published numbers.
Secondly, through the growth period of 2003-2008 we were able to get this revenue with lower effective rates because the economy was growing. New and growing companies hired millions of people and those people and companies paid taxes. An important fact in this is that 80% of the new jobs where from companies with less than 10 employees. Small companies, who often pay taxes as individuals. In fact, two thirds of those “individuals” Senator Obama includes in his tax increases are those small companies.
So as the economy is shrinking and jobs are being lost again, should we really be increasing the burden on those companies and individuals that create jobs? Or should we rather give them more freedom to create jobs and trim the size of the federal government? Since the federal budget is slated to increase by more than 10% each year, regardless of inflation, I propose we hold the current levels (save that 10%) and reevaluate where that revenue is best spent.
Senator Obama and his running mate argue that this would not be fair. That those with most need to pay their fair share. Today those top 5% now pay almost 60% of all taxes which is up over 5% from 2001. The top 10% pay more than 70% of all taxes and a full 40% of Americans pay no income tax what-so-ever. In light of these simple facts, I think it is only fair to ask, “Senator Obama, just how much is ‘Their fair share.’?” If 60% is not enough, how much is enough? Based on his plan he will give tax refunds to 95% of Americans. This includes the 40% of Americans that do not pay income taxes. This cannot legitimately be called a “tax refund”… it is called “redistribution”.