[Newspoetry] Re: Newspoetry digest, Vol 1 #752 - 5 msgs

[John Wason]

>Message: 4
>Date: Tue, 4 Sep 2001 17:02:54 -0500
>From: Joe Futrelle <futrelle at ncsa.uiuc.edu>
>To: NEWSpoetry <newspoetry at lists.groogroo.com>
>Reply-To: Joe Futrelle <futrelle at ncsa.uiuc.edu>
>Subject: [Newspoetry] I'm confused
>
>This story confuses me:
>
>http://www.nytimes.com/aponline/national/AP-Bush.html
>
>How can a capital gains tax cut *increase* Federal revenue?
>
>Am I losing my mind?
>
>Someone explain this, please.  This is not a poem!

Didn't read the story, but I'm familiar with the argument.  If this is
indeed a serious question, the answer is very simple.  It proceeds from much
the same sort of logic that has had us as a country "borrowing our way to
prosperity" for the past 50 years or so.

The logic goes as follows:

1) Wealthy industrialist gets capital gains tax cut, so more money in pocket.
2) Wealthy industrialist invests tax cut in his/her giant global businesses,
or in new construction, or in the purchase of luxury items, or in mutual
funds.  Any of these options creates thousands of new (American?) jobs, not
to mention wonderful new products and services without which people could
not live.
3) Newly-minted employees pay income taxes; wealthier industrialist pays
more income tax; more profitable corporation pays more corporate income tax.
Etc.
4) Net result: Feds get more revenue than they gave up when they cut the
capital gains tax.

The reality:  It's smoke and mirrors, like the idea of turning lead into
gold or creating a perpetual motion machine.  You are not losing your mind,
but you might as well be, because it FEELS like you are.

John