Anybody who wants to read Larry Beinhart's original post on taxes and the American economy can do so. But I think it important to repeat some of his pithy analysis:
"That's flat out not true.
"Governments don't keep the money they collect; they spend it. It goes right back in. It just takes a different route. It goes to different places.
"The places that government puts money are important. More to the point, they are important for business.
"All infrastructure is an invisible subsidy for all business."
Obama plans a huge infusion of government cash into American infrastructure. That's good. It will create jobs in the short run and benefit business in the long run. I can't think of a better economic stimulus, except maybe single payer national health care.
Think of what relieving the burden of employee health care would do for the bottom line of General Motors?
It's not good, however, that Obama is rethinking --waffling may be the better word-- tax increases on the wealthiest Americans.
And finally Beinhart's last word:
"What is certain is that tax cuts on the top brackets, and in particular on unearned income, do not produce healthy economic growth. Contrary to all expectations, tax hikes seem to produce the desired growth. All the explanations in the world, funded by all the right-wing anti-tax think tanks in the world, won't change that reality. If these explanations don't suit you, then supply a better one that will."
Amen.
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