Explanation:
Did you know that it’s possible to increase tax revenue without increasing taxes? It’s true.
Eventually we would need to cut taxes to keep them from reaching an all-time high.
How is this possible? Through renewed economic growth. Once it takes hold, taxpayers earn more and move into higher tax brackets. At the same time, job creation rebounds, creating more taxpayers than before. And that combines to pour more and more money into the federal coffers.
Dubay offers an alternative to the Left’s disastrous course: fundamental tax reform. Rather than increasing taxes, members of Congress should:
1) Simplify and rationalize tax policy (e.g., eliminate all energy subsidies, not just those for one type of energy) so that the feds aren’t playing favorites; and
2) Use the “savings” from eliminated loopholes to lower marginal tax rates, thus encouraging businesses and entrepreneurs to invest and take on prudent risk – the very activities that drive economic growth.
Raising taxes will only incentivize Congress to spend more and more. Cutting spending, however, will demand some serious belt tightening, which is exactly what we need.
