CUTTING TAXES MEANS MORE TAX REVENUE

We have been hearing conflicting reports about the budget debate between Congress and the president. Both sides are pointing fingers and claiming the opponent is distorting the truth. After pondering the facts of the situation, one major and glaring fact appears to override all others.

In 1993 and 1994, the Senate, House of Representatives and the presidency were all controlled by one party, the Democrats. Thus, the Democrats had the opportunity to balance the budget as well as reduce the national debt and cut taxes on the middle class. They didn't need Republicans' help to enact this type of legislation. Basically, the GOP could have been relegated to the status of irrelevancy.

Why didn't the Democrats balance the budget when they had the chance? The only logical answer is that the Democrats don't want to balance the national budget and get us out of debt. If they did, they would have done so in 1993 and 1994. It's that simple.

President Clinton keeps telling us he refuses to pass a budget that is bad for Americans. When did he force every American deeper in debt with the 1993 and 1994 budgets? Clinton should gain some compassion and quit mortgaging our future and our children's future. Pass the proposed budget now.

During this debate, Clinton has been claiming correctly that the Republican budget includes a tax break for the rich. What he isn't saying is that the GOP budget tax breaks help not only the rich, but all the middle class and the poor. There are basically two types of tax cuts included here. The first, a $500 credit for each child a taxpayer has, helps everyone who has a child of eligible age. This cut virtually eliminates taxes for some on the edge of poverty. The other tax cut in the proposed Republican budget is a capital-gains tax cut. Capital gains are the extra money, usually caused by past inflation, from a profit on the sale of land, a house, stocks, a business. Does a capital-gains tax cut benefit the rich? Yes, but it also helps the middle class. Clinton doesn't want you to realize that part.

Why does this cut help the rich more than the other classes? Simply because the rich own more property, stocks and businesses than the others. If anyone feels that isn't fair and that the rich should be taxed down to the middle-class level and the poor should be given assistance from the tax revenue the rich have paid, realize this: By definition, having everyone in a society of equal socio-economic class is known as communism, or abject poverty that is the eventual result of communism. If that is the type of society people wish to live in, might I suggest a move to the large island off the coast of Florida.

Why do the rich benefit the most when there is a tax break? Because the rich pay, by far, the most taxes. The top 1 percent of income earners pay 25 percent of all income taxes collected in the United States. Why don't the poor get all kinds of tax cuts? Because you can't cut taxes on people who don't pay taxes. Why does our president insist on continuing to insult us by telling us that he will cut taxes on people who basically don't pay taxes?

Why do the Republicans want to cut the capital-gains tax rate? The best way to explain this is with the following scenario. Suppose you make $1,000 a month. ONe day your boss decides to give you a $250-a-month raise. Will you stuff the extra money under your mattress and keep it there until you die? Or will you spend some of it and save some of it, or invest in something that pay interest? You probably would choose the second option. When you spend that extra money, the result is that your are stimulating the economy. Now imagine everyone with an extra $250 and spending part of it. Companies would have to make more products to meet this increased demand. Companies would have to employ more people and buy more raw materials. More people working means more people paying taxes. More people paying taxes means more tax revenue. By cutting the capital-gains tax rate, or any tax rate, people have more money and spend more money. By lowering tax rates, the government takes in more tax revenue.

The concept of lowering taxes to stimulate the economy and increase tax revenue is called trickle-down economics. President Reagan tried this in the 1980s. The result? The longest peacetime period of economic growth and the largest increase in tax revenue in U.S. history. So what happened to stall this growth? The House, then controlled by Democrats, forced us to accept deficit spending (they managed to spend even more money than the tax break provided) and raised tax rates again. Once again, if the House had just passed a balanced budget, most of us would be in a much better economic position today.

Do the Republicans what to help the poor? Of course they do. But they disagree with the Democratic, liberal way of achieving this goal. The Democrats have proven by not passing a balanced budget that they think we should give to the poor resources we don't possess. We only have a finite amount of resource to expend. The GOP wishes to make the best use of these resources. They realize that forcing the economy down with deficit spending doesn't help the poor. It hurts them. The only way to truly help the poor is to allow them to help themselves.

Do not blindly accept the sound-bit rhetoric coming from Washington. Whether your are Democrat or Republican, write, call or e-mail all of your congressional representatives and President Clinton. Communication these three words: No more debt.

Daniel M. Buckenmyer is a Cape Girardeau resident.