[liberallarry]

See me Post #60. Do you agree?

[Polybius]

See me Post #60. Do you agree?

The American economy has been moving from a manufacturing economy to a service economy. The unskilled factory laborer in the Third World will always out-compete the unskilled American factory laborer. Higher taxes and the reduced profit margin they bring compounds the problem for American businesses.

A reduction in income taxes will not, by itself, increase the spending power of the poor as the poor pay little or no taxes right now.

An income tax cut, however, do create incentive for American small business owners. If you have high labor costs and the Government takes away a hefty chunk of the profit margin, there is little incentive to invest in small business which is the backbone of the American economy.

Europe has a dilemma right now because the high tax rates are driving people, including those who could be creating jobs with their small businesses, into early retirement.

Speech by José Manuel González-Páramo, Member of the Executive Board of the European Central Bank:........"In several European countries retirement systems still provide an incentive to retire early by penalising longer working lives through high effective tax rates. In many cases this reflects the attempt to push older workers into early retirement with a view to raising the demand for younger workers. But such policies raise the burden on social security and thus on labour taxation, reducing overall employment and thereby potential growth."