The idea that when the Bush tax cuts expire at the end of this year and at the same time there are large cuts in defense spending it will have a devastating impact on our economy. This is a totally untrue and ridiculous.statement.
Scottsdale, AZ -- (SBWIRE) -- 07/19/2012 -- The expiring tax cuts will increase taxes primarily on the wealthiest 20% of taxpayers. There will also be smaller tax increases on the upper middle level of tax payers. The marginal tax rate will go from 35% to 39.6%. That is not devastating. It will not have much, if any, impact on consumption spending. There are other tax increase items that will occur such a change in capital gains tax rates. These increases also will not hurt consumption. These tax increases take place over the course of a year and will not be felt until the following year for the most part.
So far as defense spending, here again the cuts will take place over a few years. It is not going over a cliff. Defense spending will go down a hill.for several years.
What has not been taken into account is that an increase in the marginal tax rate is stimulative to the economy. The last time that the marginal tax rate was increased to 39.6%, unemployment went down to 4.0% from 7.7%. That was during the Clinton administration. It is my opinion that the marginal rate should be increased to 75% for the highest income earners. That would change the way people think about their business and result in a lot of reinvestment and job creation.
The other factor that has not been taken into account is that as money is not spent on defense it can be spent on programs that stimulate the economy such as infrastructure programs.
In summary we are not looking at a fiscal cliff. We are looking at a tax change that will stimulate the economy and a shift of spending that will also be beneficial.
The topics of taxes and the budget are covered in my book Occupy We The People Decision Time For America. Many other important issues are also discussed. I feel strongly that this is the most important book published in years. Every American should read this book before they vote. The E Book is only $2.99 on special promotion and there are links on my Victor Weintraub website.
Victor Weintraub is a noted author, economist and entrepreneur. He is the Publisher of First Capitol Books, an independent publisher of E Books and print books distributed world-wide. He is the President of First Charter Financial Corporation. He holds a degree in engineering from New York University and an MBA from Columbia Graduate School of Business. Victor Weintraub is an advocate for progressive political and social programs. He is a lifetime Republican. “I am saddened by what has happened to the Republican Party.”