Send via SMS

Monday, August 23, 2004

Issue #5 - Taxes - by Pastor Dick Helms

Last but not least of the major issues this year is that all-time favorite, TAXES. I touched briefly on this issue in the section regarding the Economy and Jobs and the onerous effect increasing taxes would have on the economy. Now I’d like to give you a short history lesson and explain the affects of higher taxes on the national attitude/moral.

Back in the late ‘60s and on through the decade of the ‘70s, in the midst of the Democrats’ (and liberal Republicans’) “Great Society” policies, the top individual tax rates had risen to somewhere between fifty (50%) and seventy (70%) percent depending on where you lived. In fact there were some sets of circumstances that would actually create individual tax rates in excess of one hundred percent (100%) on the top dollars of a high income (excess of $60M) individual’s annual income. Think about that a minute. What incentive was there to get ahead, or to build/grow a small business when the government set a ceiling on how much you could earn. To make things worse if you were able to accumulate any wealth, the government would take it away when you died though the death taxes, at times even higher than the income taxes, driving many small businesses into bankruptcy on the death of their founders. I remember getting phone calls back then from clients asking when they should arrange with their employers to go on unemployment or wanting to know when the tax bracket would jump so they could forgo overtime. Folks just didn’t think it was worth working for 30¢ on the dollar, sometimes less, and our economy showed it.

The Democrats’ (and liberal Republicans’) had achieved their goal. The government now had control of virtually all income and was using it to fund America’ great social experiments. They were a terrible failure and the results that the few conservatives around at the time had predicted proved true. Both worker and business moral were at an all-time low and the economy was dormant. Economic and business growth was nil, unemployment was at an all-time high and inflation rates went through the roof taking interest rates with them. America was on the verge of bankruptcy.

Then, the proverbial “last straw” as Jimmy Carter was elected President of the United States. The Carter administration’s disastrous foreign policy fiascos brought about the fall of the Shaw of Iran and the rise of Islamic extremists to power in Iran. (This, by the way, laid the foundations of the 911 attacks and our current war on terrorism. But that’s for another column.) The great oil embargo was at its height and domestic gas and oil prices skyrocketed to all time highs fueling inflation and collapsing the American economy.

Then, riding to America’s rescue on his great white horse, came America’s first great cowboy president, Ronald Wilson Reagan. President Reagan quickly reversed the Carter administration’s failed foreign policy disasters breaking the oil embargo and ultimately winning the “Cold War” (another column here). He drastically slashed individual income tax rates ultimately freeing the economy from its decades old bondage to our failed experiment with socialism. In spite of opposition from a still Democrat controlled congress, President Reagan succeeded in implementing much of his pro-growth policies and the results were almost immediate. Inflation slowed and interest rates fell as the economy began to boom. A boom continuing through the decade of the ‘90s in spite of President Clinton’s best efforts to bring down much of what had been accomplished. The very attitude of the American people changed, we were proud to be Americans again. People wanted to work again and times were good.

Today we stand on a precipice that could easily determine whether America repeats its mistakes of the past. As America’s second great cowboy president, George W. Bush, rode into the Whitehouse on the back of what many Christians view, in light of subsequent events, as a miraculous Electoral College victory we were in the early stages of a recession due largely to the tax increases instituted during the previous administration. President Bush was quick to recognize the problem and was successful in instituting basic tax reductions at all levels. That, plus the Democrat driven individual tax rebates (credit given where due) had just begun driving the recovery when the events of 911 befell America followed by war, corporate scandal and more war. Again, President Bush recognized the growing problems and instituted additional tax cuts for all Americans. Thanks to that foresight our economy is now nearing full recovery as it grows at a rate unequaled in the last 20 years.

Now we come to this year’s elections and the choices before us. The differences between the candidates on this issue are more defined this year than in many prior elections. The outcomes are equally divergent.

President Bush has proven by his actions a near single minded dedication to reducing individual income taxes for all taxpayers. All taxpayers, that’s important. He rightly understands that by staying the course in this, not only will America’s economy recover much sooner but the national deficit resulting from the inherited recession and the war fighting will be more quickly eliminated through the resulting economic growth. While some twenty years ago this was arguably a new theory (which worked by the way), today, this is a time tested approach that has been proven by history. We can count on President Bush to stay the course here, as in our war on terror, because of his solid Christian character that takes the long view, keeps his eye on the finish line, and does not allow himself to be blown about by the winds of political rhetoric. In this, like all of his life, President Bush will do what he believes to be the right thing regardless of the consequences.

On the other side, contrast Senator Kerry who has promised to “roll back President Bush’s tax cuts” (read raise individual income tax rates) while he says that he will reduce taxes on the middle class, but then promises massive new programs that can only be financed by equally massive tax increases. The numbers simply don’t add up to the promises. But then who knows, as a master of the politically expedient quick fix his policy will change with the winds of the liberal electorate. Therein lays the problem. A short sighted, politically expedient approach here can not work and effectively keeps moving the finish line resulting in America not finishing the race.

In summary, I must reiterate that our nation must continue the sound economic policies that the Bush administration has begun. The tax cuts, including the elimination of both the “death tax” and the “marriage penalty tax” must be made permanent. If Senator Kerry is successful in repealing these sound measures, as he has promised to do, while increasing personal income taxes to pay for his manifold promised new programs, it is very possible that our economy will not be able to bear the weight of his folly. Again, consider the foregoing when you vote this year.

Copyright © 2004 ChristRing Ministries. Permission to feely reproduce this article in its entirety and with proper acknowledgement is hereby given.

0 Comments:

Post a Comment

<< Home