The two presidential candidates have continued campaigning through the day today and tax cuts continue to come up. I have been listening for a
loooong time to the same messages and it seems like I could give the speeches for each candidate at this point.
Something caught my ear today, however, when I heard someone trying to break down the two tax plans. Sen. McCain espouses a top-down -- or trickle down -- economic plan while Sen. Obama wants to institute a bottom-up plan. We have traditionally gone for the top-down approach that says if you make it more profitable for the people at the top (businesses, investors, owners, etc.) then that will mean that jobs are created and products available for consumption, leading to more money flowing.
The bottom-up plan means that taxes are kept low for the lower and middle classes, thereby alleviating the pressure on the lower classes to meet their economic challenges. To pay for these tax cuts, one taxes the people at the top with the effect of bringing everyone to the middle. The poor get closer to the middle, the top gets closer to the middle and the middle...well, they're pretty much stuck where they are.
This is a huge difference in philosophy and a troublesome difference in my opinion. This is the way I see it:
The people at the top are creating wealth in this country, not the people at the bottom. Last I checked, this is still a relatively hands-off capitalistic economy. If the folks at the top feel like they are not going to get enough return on their investment or can make a greater profit margin elsewhere in the world, they will begin moving out of this country or standing on the sidelines waiting for the rules to change. There is no loyalty in business whether you're talking about the
Wal-Mart brand or the United States brand. Businesses are instituted to make a profit and they will seek out the best ground in which to make that profit. For a struggling economy, this is a bad direction.
If taxes are cut at the top -- yes, for those horrible wealthy people -- then businesses are going to remain here, which means investment remains here, which, ultimately, means China continues to invest in our economy. They are an integral part of our success and without their investment in our markets, we will collapse. What we've seen at this point is just the quick jolt that precedes the fall. This ain't nothing compared to what it could be.
So we keep the people at the top, they keep churning out products for people to buy, they need employees to make said products, everyone wins. In a down economy, we need to look to the likes of George W. Bush and Ronald Reagan. Cut those corporate taxes or prepare to meet your ruin.