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Lower taxes strengthen the economy

QuickPoint!

Some folks are pushing higher taxes in Oregon as a way to strengthen the economy. A January 5 Oregonian editorial exemplifies this argument; it concluded, “the small [about $1 billion] tax increase is much better for the Oregon economy than big reductions in spending.”

Well, if a small tax increase is good for the economy, the state government should tax 100 percent of all Oregonians’ incomes, and politicians and bureaucrats should decide how to spend it. By that logic, our economy would always be hotter than a woodstove during winter in Wisconsin. Or Moscow.

At play here is another faulty idea: When We the People spend our money, we don’t help the economy. That’s false.

If we had our tax dollars back, we’d spend it on luxuries — like food, shelter, and clothing — go to the movies, take vacations, and contribute to countless charities. When we spend our own money, it benefits the economy — except those employed in pork barrel politics. Plus, the government middleman wouldn’t take a percentage, so more of our money would support a productive economy.

Some argue, we’ll lose federal tax dollars. Again, this train of thought advocates that we tax ourselves a lot (up to 100 percent) to take even more federal tax dollars from total strangers in other states.

By February 3, you decide for yourself whether to accept or reject the legislature’s billion dollar tax package. However, know this: Your money in your pocket is great for the economy.

Kurt T. Weber is vice president of Cascade Policy Institute, a Portland, Oregon based think tank.

© 2006, Cascade Policy Institute. All rights reserved. Permission to reprint in whole or in part is hereby granted, provided the author and Cascade Policy Institute are cited. Contact Cascade at (503) 242-0900 to arrange print or broadcast interviews on this topic. For more topics visit the QuickPoint! archive.

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