Michael Choate Associates CPA

Tax Relief Cost?

As a general rule, I believe federal taxes are too high and are an economic disincentive. Accordingly, all tax relief is welcome. Bureaucrats beware!

Ever notice how tax cuts are often described as a government "cost" instead of a "potential" decrease in revenue? I say "potential" decrease in revenue because many times tax cuts generate increases in revenues. Even if revenue did decline, why couldn't government reduce expenditures? This would balance the budget too! hmmm...

The following editorial summarizes the mis-information about tax cuts...

Investor’s Business Daily in an editorial: "Of all the phrases used to poison tax relief, few are used as often as the expression "pay for," as in: "How does he plan to pay for his tax cut?"... The simple truth is that tax cuts don't have to be paid for. They are not a good or service that the government must purchase. There is no transaction... Tax cuts are not spending. There can be no cost to a tax cut because it is not a government program or expenditure... A tax cut simply lets taxpayers keep more of what is theirs. There are no costs, except in the minds of big-spending lawmakers, bureaucrats and the recipients of redistributed wealth. In their minds, a tax cut carries a high cost because they fear losing the power and benefits they derive from using someone else's money... Untwist their terms, and the truth becomes obvious: What they fear is not increased spending, but the chance they may have to reduce it." AMEN.