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A Repuke tax cut is supposed to increase government revenues like this:
1) The government cuts taxes on the rich 2) The rich take the proceeds from the tax cut and build new factories, hire workers and make products 3) The employees hired in step 2 pay income tax on the money they earn. They also pay all manner of other taxes. 4) The products made in step 2 are sold in taxed transactions 5) The rich person's factory's revenues are taxable income, which causes money to flow to the government
That's all well and good...but! If you're pulling down a million a year and your tax rate goes down by four percent, is that enough money to allow you to open a factory? If you're pulling down 10 million a year, is a four percent tax cut going to allow you to start a new business? Well...no. It's not. The reality is that unless we ELIMINATE taxes on the rich, all of these wonderful things that tax cuts are supposed to do...won't happen.
A rich person who just received a tax cut could take out a massive loan to start another business or expand the one he already had--but he could do that without the tax cut, too.
Here's how the shit really works: 1) Rich person receives tax cut 2) Rich person does one of three things: buys more stock with it, trades in his Mercedes for a bigger one, or trades in his yacht. 3) The ONLY way a stock purchase is going to help a company is if you're buying into an IPO. Buying "used" stock is like buying a used car in that none of the money from the sale is going back to the company whose name is on the certificate. The person who sold the stock to the broker gets some of what you paid; the brokerage gets the rest. 4) Buying the new Mercedes should help the economy...of Stuttgart, where they made it. Also benefitting are the company that owns the cargo ship, the company that unloads the car from the ship and imports it into the country, the company that drives the car from Bayonne to your local dealer, and the local Mercedes garage. Same deal with yachts, but your smaller--under 120 feet--yachts are made in the US so that's a different story. Actual Americans get to eat good when you buy a new yacht. Everything they eat tastes like acetone, but that's beside the point. Really massive yachts are made in European shipyards. 5) After the yachts, cars and stocks are purchased, all fifty freepers sit around going on and on about how wonderful the tax cut was for them. "Why, I just got a job polishing Mr. Warbucks' new Rolls-Royce. I wouldn't have this job if Dear Leader's tax cut didn't let Mr. Warbucks buy a new car."
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