Our current tax system is taking too much money from the very people who make our economy strong. More importantly the tax system imposes a steep penalty on growth factors such as saving and investing. (Mitchell) To stimulate the economy Washington needs to take a "Free Market" approach to the federal budget. Daniel Mitchell, in the book Why America Needs a Tax Cut states, "The keys to economic growth, at least in terms of fiscal policy, are the size of government and the structure of the tax system" So aggregate government spending, whether it's from taxes or borrowing, slows the economy by taking resources from the private sector who have a stake in spending their resources wisely and giving to politicians and bureaucrats who focus on political incentives. The appropriate approach for policymakers is to review government programs and determine whether they will offset the loss of money to the private sector. For example "A certain level of transportation spending will faci

Conservatives believe that lowering tax rates will spur economic growth, while liberals believe that reductions if enacted, will help the rich disproportionately while widening the deficit (Mitchell). However, there is a way to judge the desirability of lower tax rates. The United States has had three major episodes of tax rate reductions, the 1920's, 1960's, and 1980's.

 When the investor sells the stock he is hit with one of the highest capital gains taxes in the industrialized world. Then he is taxed on the nominal gains. Don't forget the person who sold him the stock originally may have been subject to capital gains taxes on that sale.

 35% is skimmed off to pay the corporate income tax

Economists are nearly unanimous in their recognition that capital formation is the key to economic growth. The way to form capital is to allow American citizens to keep more of their own money.

Another aspect of cutting taxes is ultimately reducing the governments spending. There is an idea floating around Washington that supports putting a "Trigger" on any tax cuts passed by congress. What most Americans don't know and what most congressmen do know is that triggers represent an attack on tax cuts (Schlecht). Triggers represent a fundamentally perverted reasoning that the surpluses belong to Washington and therefore the decision of what to do with them lies with Congress (Schlecht). Surpluses are overcharges on the American taxpayer and ultimately belong to the taxpayer. Alan Greenspan, Chairman of the Federal Reserve said, "A vote for a trigger today is a vote for tax increases tomorrow". Triggers state that taxes will be lowered if Congress does not spend the surpluses currently in Washington. But if this Congress is anything like every other Congress the surplus will be spent and tax relief will never come.

Some topics in this essay:
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