Taxes

Four years ago the idea of a “windfall profit tax” sounded decent. Now, as a student of Public Affairs and an avid reader of the Economist and Fortune magazine, the idea of a tax on high profits just doesn’t fly with me anymore. Same with the capital gains tax. Taxes have their purpose, they are great at encouraging certain behaviors, and discouraging others. Provide a tax incentive to act a certain way and you will see a market or group of people act accordingly, maybe not immediately and totally, but you will see a trend. Tax cigarettes to all hell and sooner or later someone, maybe the majority, will make the call that they can’t afford cigarettes. It’s cheaper policy to implement and it’s less invasive.

Taxing income, capital gains, and windfall profits will provide the same sort of incentive/disincentive situation the cigarette taxes provide. We need to move these taxes away from income and capital gains and into another sphere. We need taxes encouraging corporate PRACTICES, individual PRACTICES, etc. If we want to encourage car companies to change their milage standards, we don’t need a mandatory regulation, we need taxes. Lets say we want cars that get at least 90 MPG by 2020. We cut income and capital gains taxes, while adding to a tax on car companies who don’t sell at least one car that gets 90 MPG at an arbitrary price (lets say $9,000). This way, car companies that want an edge on the US market can do so without a painful regulation. If they don’t want the edge, they pay the tax and continue with their free enterprise. However, the first company to put that $9,000 90 MPG car would get an edge on the market and on their tax burden.

Simply put, taxes encourage and discourage behavior, and they are better than dictating behavior.

Party closest aligned with my views: Republican