On the poll on the previous post, if you said “b” you win the prize! (what’s incredible is that the top wage earners actually paid MORE in taxes!)
As stated in his essay “Trickle Down Theory and Tax Cuts for the Rich”
Tom Sowell highlights that RATE cuts are not tax REVENUE cuts.
In fact, he shows that there were 3 more big tax RATE cuts since 1920 that produced similar results. Why?
Taxes are a claim of government upon wages earned. The higher the rate on one’s earnings at least 2 things tend to occur:
- There is a disincentive to work more (would you work more if 70, 80 or 90% would be taken in taxes?)
- There is less money available to invest/reinvest
The inverse is true when tax rates are cut (incentive to work more because you keep more and there is more $$
available to invest/reinvest).
As you close the year consider smart tax strategies like tax loss selling or maxing out retirement savings.
As you look to upcoming tax season, consider smart tax strategies like planned Roth conversions.
Whether beginning the year or ending the year, think smart taxes.
