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November 14, 2009

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Letter: Raising taxes reduces total taxes collected

Friday, Dec. 28, 2007 | 7:17 a.m.

I wish someone would give me an intelligent response to my stand against raising taxes when economic times are bad.

FDR did it after he was first elected in 1932 during the Great Depression. Income taxes were increased, and, with that tax bite, it was impossible for anyone to accumulate venture capital. As result, unemployment was even higher by 1936.

Look at it as a businessman. Would Wal-Mart benefit by increasing prices when times are bad?

By the same token, wouldn't the effect of increasing the percentage rate of, say, the sales tax or gas tax reduce the amount of money people could spend? And along with the reduction in spending, a reduction in total taxes collected?

And as the people get tightfisted, won't the economy go down another notch, calling for (you guessed it) yet another tax rate increase, followed by another downward step in the economy?

So on and on we go in a downward spiral. Where we stop, nobody knows.

I don't claim to be some economic wizard, but I can't find anyone who can intelligently dispute my thesis.

Maybe one of the university professors would like to take a crack at it. Just don't con me with "You can't apply sound business practices to running a government." Sure you can. Common sense is common sense. All you have to do is use a little.

Bill Cramer, Las Vegas

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