If the highest income tax rate increases from its current 35% to 44% (including Medicare and Obamacare tax increases) on the wealthiest taxpayers, a high income family making $500,000 will have $45,000 less to spend. That family may decide to cut out a gardener, housekeeper, vacation, or even a new yacht. A progressive might say "so what, they are rich, and they...
I remember a conversation I had with a Republican a while back and mentioned that America should immediately scrap all farm subsidies and ethanol mandates. He told me, "We would all starve without farm subsidies and government assistance in the agricultural sector." I instantly ascertained that this Republican had zero confidence in truly small government and free markets. I think he is a Communist. Here's why, see below.
It may not be intuitive to nonbusiness people and economists why increased taxes and reduced federal spending will send the US into a recession. However, it is not hard to understand the economic logic that causes this result.
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