Why Should Congress Repeal the Bush Tax Cuts?

I want to put my two cents into this discussion. In short, I believe that the Bush Tax Cuts should be repealed. I don't earn over $250,000, therefore, I do not receive any benefit from them. I'll admit that. So you're probably thinking that I am just saying this out of jealousy. Well, you'd be wrong.

First, note that you must EARN over $250,000 per year to receive these tax cuts. In income tax terminology, to earn income you must DO something to get it. Investment income does NOT count as earned income. Look it up!

Second, what do you think people who DO earn more than $250,000 per year do with that money? They invest it. Where do they invest it? The stock market. That's the only place to invest. However, where does the money from the sale of stocks in the various stock markets go? That's right. That money goes to the brokers, brokerage firms, and the ones selling their stock. At no time does this money go to the company who's stock is being traded.

Those that want to continue the Bush Tax Cuts say that if these cuts are repealed this money will be lost for the creation of new jobs. However, as I just said, this money does not go to the company. Therefore, the company cannot expand production, research & development, or anything else associated with their jobs.

The only money that the companies receive from the sale of stock is from the company that agrees to underwrite the initial stock sale. This is during the Inital Public Offiering (IPO) phase. A company cannot receive any money except for the shares of stock that is actually purchased. And by SEC regulation, a company cannot just issue stock whenever it wants. It requires an action of the Board of Directors and an actual reason for the additional shares of stock to be issued.

Besides the IPO, the only way a company can receive additional money is through revenue generation or taking out a loan. So, if no one can buy the company's product(s) or the company cannot borrow more money, there is no way for them to receive any more infusion of money.

So the next time THEY tell you that the Bush Tax Cuts will create jobs, tell them to go to Target (or your favorite store) and actually buy something. Until faith in the economy can be re-established, we can keep begging for something to be done.