About 1 percent of taxpayers in the country are rich, and these people are usually successful entrepreneurs and business owners. Their businesses employ workers who get paid, and they in turn pay taxes to the IRS.
Our present government plans to raise taxes for the rich by the end of 2010. So, what will happen to our economy if this occurs? Let's take a look at a simple small-town model of 100 families where there is one rich person (call him Mr. Richards), who owns and runs a large mom-and-pop convenience store with full-service gas station with an auto repair shop. The store has employees and sells vegetables, chickens and meats provided by several town members who earn a living as farmers. Other residents supply the store with artwork and needed hardware goods like furniture. The federal government has little to do with this town except collect taxes. The families happily survive.
Now, the present government administration plans to raise taxes on the 1 percent rich. If and when that happens to our rich business owner Mr. Richards, he will suffer a financial hit and won't be able to make a profit. He will lay off his employees, won't qualify for a loan from the bank to modernize his store, and he files for bankruptcy. The government in Washington, D.C., steps in and hires at least one person to cover the actions needed for this town - like getting stimulus money to build some unwanted traffic light.
Let's multiply the above model numbers by 100. So, we have a town of 10,000 families with 100 rich business owners. Raising the business taxes on these 100 business owners could force them to reduce the number of their employees and eventually close their doors, as in the above model.
Oh! We now get saved by our government. That one government worker in D.C. has now been multiplied to 100 to take care of this larger town. These bureaucrats will all get handsome salaries from your tax money and will distribute more of your tax money to you (if you still have an income) in the form of larger unwanted stimulus shovel-ready projects.
It sounds like socialism to me.
We need the rich to create jobs.
The writer lives in Myrtle Beach.