Letter: What taxes do in the local economy
Interesting to listen to talking heads make forceful statements citing numbers they simply make up. Of course, if not challenged, they will be believed by enough voters to swing elections. A few favorite examples are the "trickle down" economic myth and Obama's contribution to the national debt.
The notion that pushing more money up the wealth pyramid by reducing their tax burden, initiated by President Reagan and since a Republican dogma, will somehow result in dramatic economic growth has been disproven repeatedly ever since. Most recently the Bush tax cuts of 2001 while engaging in two expensive wars and the resulting chaos in the Middle East.
These irresponsible acts laid the foundation for our $20 trillion national debt in addition to the millions of lives lost and cities destroyed. Don't even try to blame the last $8-9 trillion on Obama. It is simply eight more years of Bush-created deficits ($1.6 trillion) which he passed on to Obama. Obama's policies have reduced it to $450 billion.
Now the Republicans are at it again with their "new" tax plan. It's simply a tax cut for the wealthy and corporate America while tossing a few bones out to the middle income class, like doubling the standard deductions for single and married couples.
This is the old, unproven "trickle down" Reaganomics more accurately labeled HOPE economics. Give money to the already rich HOPING it will eventually get down to the people living in and around small cities and towns across rural America. Corporate America doesn't need tax cuts to grow. They are already flush with money.
Tax cuts starve the government's ability to provide essential public services and economic infrastructure (roads, bridges, airports, energy grids, GPS, internet, educated/trained workforce, health care...) individuals and private businesses cannot. Republicans generally believe government is a deterrent to economic growth due to over-regulation and high taxes.
Look at it from a different view. The assertion that the private sector is the biggest job creator is true only if there is consumer demand/resources for their goods and services. Where does a large share of resources come from? The government. From the president on down through military, agency employees, educators, law enforcement, regulation enforcement, maintenance employees... government employees number 25 million. Average cost per year including salaries and benefits are $130,000 each.Total: $3.25 trillion/year.
You can add the employees of government contractors, insurance and retirement fund managers...to get the total impact of direct flow of government money to the people. Federal outlay to private contractors is around $500 billion, not even counting state, county, and local layouts. Add to that Social Security's $900 billion and you're up to $5 trillion in direct outlay annually.
Since salaries are in the middle income range, it is safe to assume that most of the money will be spent and circulated on goods and services within their communities, unlike the affluent whose basic needs are met with a small percentage of their wealth. The rest is mostly invested in "paper" circulating in its own sphere. Scope of impact comparison: 25 million middle income people spending most of their income verses 10 million upper income people spending a small share.
This government-generated consumer base is an essential element of economic stability and growth. Businesses cannot thrive unless there is consumer demand and resources for their products and services. Take Park Rapids for example. Government employees are in the area schools, Hubbard County seat, police and sheriff departments, clinic and hospital from medical funding...and those employees are a major, stable part of the consumer base for our supermarkets, restaurants, service stations, American Legion Club, hunting and fishing suppliers, car dealers, real estate....even churches.
Add those on Social Security, government retirement and public assistance and we can realize the full economic impact of government's role in sustaining the local economy.—Lee Purrier, Park Rapids