Budget Deficits, United States Debt and Taxes

During this episode on government spending, touching on budget deficits, the United States debt and taxes, Dennis McCuistion is joined by:

• Daniel Mitchell, PhD, Senior Fellow of the Cato Institute and former Senior Fellow for the Heritage Foundation
• Stephen Moore, member of the Editorial Board for the Wall Street Journal and senior economics writer
• Richard Rahn, PhD, Senior Fellow of the Cato Institute, Chairman of the Institute for Global Economic Growth. He is also a weekly economic columnist for The Washington Times.

During this engaging, high energy discussion on the role that government has played in the financial crisis of today, we are enlightened by the experts in causes, solutions, and cautions regarding budget deficits, United States debt and taxes.

Richard Rahn addresses supply side economics. Supply side economics is:

“a school of macroeconomic thought that argues that economic growth can be most effectively created using incentives for people to produce (supply) goods and services, such as adjusting income tax and capital gains tax rates, and by allowing greater flexibility by reducing regulation.”

Taxes

Addressing the flat tax, Richard Rahn says that it is presently used in 26-28 countries. However, Iceland is getting rid of their flat tax, which was too high at 37%. Flat tax is supposed to be a low rate system as it is in Central and Eastern Europe. He says flat tax is not a silver bullet. More growth and more entrepreneurship is still needed.

Stephen Moore and Daniel Mitchell also address the tax situation and address the fair tax. The fair tax is a national consumption tax that is essentially a sales tax. This would eliminate the need for corporate and personal income tax. They assert that this would be a dream come true and of great benefit, saying that the world is passing us by.  They warn, the United States may have to raise taxes to pay for the new health care system.

Spending some time to discuss big government and 2010, they touch on tax cuts, government spending and predict that the death tax, capital gains and personal taxes will go up in 2010.  The offer warnings on the vat tax as well.

Wrapping up the conversation, they discuss the Laffer Curve, tax rates, taxable income and tax revenue and how tax is collected. Citing  history, they discuss the President Regan Administration and the current concern about a massive tax increase on the middle class.

This episode offers compelling inside into today’s economic times. We welcome your comments on the episode below.

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1802 – 10.04.09