Thursday, January 8, 2009

Democrats should support supply side tax cuts

For some reason my party is stuck on the idea that tax cuts don't work. Sure all tax cuts might not stimulate the economy, but surely some of them do and will.

Take this example:

A company or individual has an idea that they think can make a profit under certain circumstances. They have done research that says:

They can produce and sell a new product at a profit in 5 years at
$100,000 in labor and production
$100,000 in advertisement and marketing

But this would take 4 years of losses; but if those projected losses are offset at least somewhat by lower taxes on their existing business or income, it makes the person/company more likely to hire or take a risk.

The idea that the economy is so bad that companies won't produce products people won't buy is bogus.

First of all, Obama is proposing cutting taxes and increasing spending so there will be more money in the economy, and second of all, the businesses will be advertising and marketing trying to get people to expand their normal purchasing.

It happens all the time.

Things we didn't use to think about are now "must haves":

*Think cellphones
*Think pay television (cable/satellite)
* think ringtones

We should have both supply and demand side tax cuts.
We should have both investment and consumption spending

Democrats need to be more open-minded on all topics and then do what is right.

can pro

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