Tax Rates
A commonly discussed issue is how tax rates relate to economic growth. Supporters of tax cuts claim that a reduction in the tax rate will lead to increased economic growth and prosperity. Others claim that if we reduce taxes, almost all of the benefits will go to the rich, since the rich are the ones who pay the greatest percentage of the taxes. (Who Paid the Taxes, 1966-85?, pg 3) Tax cuts can benefit everyone and the economy if they are made in the right places and only too a certain extent. Taxes are extremely important in three key areas. An Army, to protect against foreign invaders, A police force, to protect against domestic criminals, and a court System to settle honest disputes that arise, and to punish criminals according to objectively predefined laws. (www.economics.about.com, pg 2). Its easy to see why these last two functions are super important to economic activity. Without a police force people would spend a lot more time trying to steel what they need and a lot less time trying to produce what they need, since stealing stuff is most often easier then having to put in the time and labor of producing it yourself. Without people producing goods economic growth would stop. The people that did produce the v
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