Walter Williams is a professor of economics at George Mason University. He was the graduation speaker at the college graduation of one of my daughters. He is also an occasional guest host on the Rush Limbaugh radio show. He is a brilliant man with a thorough understanding of economics.
He posted an article at Creators.com citing how politicians take advantage of the economic ignorance of the American voter. He mentions an area of the study of economics called "tax incidence." This is the study of which people actually bear the burden of a tax when it is levied. He cites the example of a tax levied on gasoline retailers--when it is increased some of the tax is passed on to the consumer in the form of higher gasoline prices.
He explains in this article:
"What about the politician who tells us that he's not going to raise taxes on the middle class; instead, he's going to raise corporate income taxes as means to get rich corporations to pay their rightful share of government? If a tax is levied on a corporation, and if it is to survive, it will have one of three responses, or some combination thereof. One response is to raise the price of its product, so who bears the burden? Another response is to lower dividends; again, who bears the burden? Yet another response is to lay off workers. In each case, it is people, not some legal fiction called a corporation, who bear the burden of the tax."
The way to increase the amount of money that comes into the United States Treasury is not to increase taxes--when taxes increase, economic activity slows down. The way to increase the amount of money coming into the United States Treasury is to increase the productivity of the American people. The more people who have jobs, the less people on unemployment, as the number of people working increases, the number of people paying taxes increases, as less people are unemployed, less unemployment is paid. This helps balance the budget.
The high unemployment rate now is due to uncertainty on the part of businesses as to what their tax and healthcare expenses will be next year. Businessmen are unwilling to hire anyone until they can begin to plan an operating budget for next year.
All we need to get this economy moving is to elect Congressmen who will get the government's hands out of small business--both in the form of excessive taxation and excessive regulation. That is the change that needs to be made in order to restart the economy.
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