Obama’s way gives more purchasing power for middle income earners
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Sen. Barack Obama's economic plan builds the economy from the bottom up. To accomplish this, he will implement a series of job creation initiatives and readjust the tax rates-- both are essential for increasing the broad based purchasing power for middle income earners. Both large and small businesses need customers with purchasing power and a willingness to spend. Viable demands for products and services are the major factors in making business decisions to build plants, purchase equipment, and hire new people. Other important factors, probably more than tax-cuts are easy credit and low interest rates.
Viable and sustainable demands for products and services are the overwhelming considerations when making business decisions, rather than tax cuts. For example, raising the ordinary tax rate from 36 to 39.3 percent for wealthier individuals or increasing the capital gains tax rate from 20 to 25 percent is not a deal breaker when viable demands for products and services exist, and if the demand does not exist, a tax cut will not encourage job creation. Sen. Obama’s tax cuts will increase the purchasing power of middle income earners at a minor expense of wealthier individuals paying more taxes. The benefits to the wealthy from increased economic activity driven by middle income earners will more than offset the roll-back of the rates to where they were under the Clinton administration.
A healthy economy that is driven by broad-based purchasing power of middle income earners will benefit the wealthy because stronger demand for products and services will increase profits, dividends and stock prices. In contrast, too much latent (or unused) purchasing power for the wealthy and not enough purchasing power for the middle income earners has resulted in a stagnated the U.S. economy. Therefore, there is an urgent need to pursue tax policies, job creation programs/initiatives, and investment tax credits that would result in higher paying jobs and increasing purchasing power for middle income earners.
Some might argue that these small proposed tax increases on the wealthy will discourage investment required for job creation. This is a flawed argument because if one company does not act to seize the opportunity that a viable and sustainable demand presents, their competition will. Nothing motivates companies more than their competitors taking their business.
C. Denver Lovett
Reston
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