Ultimately, the only one who can grow the economy is the consumer. The government cannot grow the economy, they can only spend the money. The problem under the current system is as the economy shrinks, the few who can pay more. Now, let's take a different approach to this problem and address a solution to encourage consumption and thus overall economic growth.
Ok, now let's get started. I think we can all admit that our current system of taxation is not working. A broad statement you may say and indeed that is the case. For if the current system was working, we would not have the current financial issues that we are facing today. Let's face facts for one moment, consumers are afraid to spend, employers are afraid to hire and the government cannot run on the revenue it is receiving.
I perceive this problem to be one of low consumption. You see, when consumption increases, the economy increases. Whether we like it or not, we live in a consumption based society. In order for my business to survive, I need you, the consumer, to open you wallet and shell out the greenbacks.
Now let's take a look at the past 8 years and the Bush stimulus checks. The theory was simple, send a person a check and they will buy stuff, at least that is what was supposed to happen. Instead, what happened is the government sent checks to consumers, based on children or income o some other nonsense, and they used it to pay off debt or put into savings. Bottom line, it was not used to buy stuff. Our economy and our very existence relies on stuff.
Now let's take a look at our current tax laws. We have certain incentives in place to buy a house or incur other expenses, such as business expenses. However, due to the perceived "greed" of consumers and businesses, the government has imposed limits on what can be deducted. I think at this point you may know where I am about to go.
Here is the case for higher taxes. I say raise my taxes within reason. I say raise my business taxes within reason. And then I say, let me take all of my deductions 100%. I am not talking about just the current deductions, I am saying all deductions. You see, in order for me to declare a deduction, I must consume. I have to incur the expense in order to claim the deduction. By incurring the expenses, I am contributing to the growth of the economy.
For Example: Under today's tax laws, I cannot declare personal interest paid on loans or credit cards. But, if you let me take 100% of my personal interest, then I may incentives-ed to buy a new car and deduct the interest on the loan, or buy stuff and extend my charge cards and write off the interest. You see, this would give me an incentive to consume. I consume, someone has to either make the product or provide the service for me to consume and by default, the economy would grow. For the additional deductions, I would be willing to incur a higher tax rate. My incentive to reduce my taxes would be to consume, to incur expenses. Those expenses would expand the economy.
Thus folks, my case for higher taxes.