Sunday, January 08, 2012

Tough Times Ahead

I extracted the following quotes from this article. I believe that it is well worth your time to read but if you don’t feel like it then consider these words of wisdom.

"The history of taxation shows that taxes which are inherently excessive are not paid. The high rates inevitably put pressure upon the taxpayer to withdraw his capital from productive business and invest it in tax-exempt securities or to find other lawful methods of avoiding the realization of taxable income. The result is that the sources of taxation are drying up; wealth is failing to carry its share of the tax burden; and capital is being diverted into channels which yield neither revenue to the Government nor profit to the people." Andrew Mellon Secretary of Treasury for Warren Harding.

It seems to me that we would be very foolish not to look at history and see what has occurred at other times from the current era to the fall of the Roman Empire which can be traced back to policies that are very similar to those of the current president of the USA.

For wisdom let us look at someone from the party he says he represents though from another time: John Kennedy.

"Our true choice is not between tax reduction, on the one hand, and the avoidance of large Federal deficits on the other. It is increasingly clear that no matter what party is in power, so long as our national security needs keep rising, an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget just as it will never produce enough jobs or enough profits… In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now." John F. Kennedy

We are spending money we don’t have to make things better in the USA today. This is like a family maxing out all of its credit cards. The question remains this: What will happen when no other nation will lend us money? That I believe is a fearful day and fast approaching. Worse yet is the day when no one will accept our money, when it is viewed with the same disdain as the peso… indeed times are going to get tough.

© 2012 Vic Jones

1 comment:

writeonwithsheila said...

Great blogpost. Great blog. Super-duper!

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