If there is one thing the Republican Party stands for it is tax cuts. That is because it is Republicans who actually pay taxes. Over 95 percent of federal income taxes are paid by the top 50 percent of taxpayers.
So why then is Republican US Senator Olympia Snowe
balking at the extension of the 15 percent dividend and capital gains taxes enacted in the great Bush tax cuats of 2003? Is it just grandstanding, or is she using the tax cut issue to push her pet project?
Republicans had better watch out, writes investment guru
Larry Kudlow. Even if the Democrats insist on disrespecting the investor (and risk-taking) class in their eternal drumbeat about tax cuts for the rich, the investor class might want to teach Republicans a lesson if they don’t deliver on an investor-friendly tax regime.
Republicans may be alienating their most natural supporters. In recent elections, nearly two out of every three voters were stock owners. Where will they turn if the Republicans they put into office no longer represent them?
The problem for investors is that they really don’t have an alternative. Ever since the early 1980s the Democrats have set their face against the supply-side menu of low tax rates. They persist in a vision of the economy as an enlargement of the federal budget. You take money from the taxpayers to fund programs for Americans.
But that is not how the economy works. The economy is a world in which people make goods and services for other people in society so that they can get in exchange the things that they want: food, housing, transportation, health care. The results are in on how to make the economic system work better. You create a level playing field without hills of privilege and subsidy and the valleys of high tax rates and punitive regulation. The more you enact privileges and subsidies—the more that Congress does what comes naturally—the more you distort the relationship between producers and consumers, and the more you leach prosperity out of the system.
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