Tax Plans Only Part of the Solution

As Trump (and others) talks tax-reform it is important to know that rate reductions, though significant, are only part of the solution. True, taxation often works to counter economic development, the rise of which (tax rates) follows growth in government which then trends toward economic deceleration; the facts are undeniable.

In order to trigger an economic resurgence it is insufficient to merely reduce “rates” as this action does nothing to address what occurs with the funds retained that would have otherwise gone to government coffers. The solution is to tether Corporate Tax Rates to a scale that is based on their investment in Domestic Productive Capacity and in the Technology Development that makes use of it.

It is absolutely the case that Individual Income rates should favor Middle-Income and below earners, but everyone should have a duty to support the system they draw upon. For this reason there should be a 2 tier rate system that is indexed. In the case with a Corporate/Business structure where the rate(s) are applied to Gross Income, reduced ONLY by direct (domestic) production costs, free of the various loopholes and deductions.

Trump is correct that Government must be run on financial terms, like a business and subject to the same financial restrictions (unless in the case of a national emergency) as the people it is intended to serve. When a free-market economy fails, it is not necessarily because the free-market system is flawed, but more often the case it is due to a demand placed on the system it was never designed to address. This explains why Socialism fails and why Tyranny appears.

Curtis C. Greco, Founder

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