..According to published accounts, the rebate will add $168 billion to the nation’s deficit – to be repaid with future taxes – in order to provide varying handouts of up to $1,200 per couple plus $300 per child. But before you write that thank you letter to the local congressman, take out a calculator and do the math. There are 303.4 million Americans out there, meaning the average rebate should come to $553 per person, or $2,212 for a family of four. But the maximum grant that family of four can possibly receive is $1,800. So for that family, it means $2,212 in taxes out of one pocket to put $1,800 into the other.
Supply-side economics, says the father of supply-side economics, only works by cutting the marginal rate of taxation. Reducing a family’s marginal tax burden by $1,800 would not only cost the treasury less, but would reward that family for earning more income or sheltering less – resulting in higher productivity. That, of course, is the one thing that Congress won’t even consider. It brings to mind Mark Twain’s famous observation,
“Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself.”READ MORE
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