Do we really need a tax cut right now? I know everyone wants one, but even the Republicans are not as shy about doling out pork as their reputation would suggest, and it looks like we're going to be spending plenty in coming years. Maybe it's just my personal perspective on savings vs. spending. I have as much in the bank as research shows the average person has in credit card debt.
Nor do I think it particularly provides a boost to the economy, since the upper brackets are already probably spending as much as they're going to spend on non essential items, and the lower brackets should be putting it in the bank in case they lose their job in the coming months. To me it's just a "feel good/payback" kinda thing.
Had an interesting discussion the other night with an oral surgeon in the .05 bracket. He went into great detail explaining his spending habits, $2 million house and even pointing out how much he pays in taxes ($150,000). He's even going to buy the same car I plan on buying (a Mini Cooper S) only he's going to autocross race it, since he already has several Jags. He's all for the tax cut.
It did help point out a couple of differences between what a tax cut means though. In his bracket, the money would buy his Mini Cooper S. In a lower bracket, a tax cut can be used to help pay for a child's college tuition, which will never be one of his concerns. He's worked hard to get where he's at (but having wealthy parents and a quality education provided by living in the right neighborhoods also helped). At this point, all his needs in life are covered 2-3 times over -- food, housing, college for the kids, transportation, healthcare, retirement. To him a tax cut is a new toy. To someone in a lower bracket it might mean a little easier time sending the kid to college. You reach a certain point with wealth where it works for you.
His kids will have a lot easier time living the American dream because they will start out ahead of the game. People born without those advantages can overcome the situation, far easier than in most places, but they will have to work harder to get there all other things being equal. Now could I be just a tiny bit jealous? Sure. But, I wasn't exactly born into poverty myself and can see the advantages you get in America seem to multiply as you acquire more wealth, particularly after you can cover your basic needs. Of course he also believes that we are here as a result of space aliens (man, I thought he was trolling, it's a good thing I didn't start joking around too soon ) and that we are using Star Wars to fight aliens in orbit today, so I don't feel all that jealous in the end.
As also pointed out, the upper brackets can pay for good accountants, and the IRS confirmed in that testimony a few years back that the tax cheats they go after are usually in the lowest brackets, since they lack the resources to fight back.
Regardless, I'm more for less spending (poorly-executed social programs and blatant corporate welfare) as opposed to continued higher spending and a tax cut. And again, I will be surprised if the Republicans show any more restraint, even where blatant pork is concerned, than the Democrats.
Charon
