If we’re going to give tax breaks, they should go to the exporting companies that generate the country’s wealth.
The key question that we need to ask ourselves is whether we want more after-tax income or to pay less in taxes. Before we go there, a few facts may be of interest.
In the past 20 years, the United States has shipped about $7 trillion of its wealth abroad. This is the total of all the trade deficits. The United States has been becoming poorer.
We have not felt the impact of this diminishing wealth until now, because we have been a borrowing nation. In the 1990s, our businesses borrowed during the dot-com boom — creating then-Fed Chairman Alan Greenspan’s “irrationally exuberant” stock market — and led to the dot-com bust in 2000. During the past decade, the perfect storm of Greenspan’s easy money, securitization of mortgage and other loans and the political philosophy that everyone should be able to own a home created the housing bust.
Now we are on a government borrowing binge. This, too, shall end.
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Read: “Do we need tax cuts or smart tax cuts?,“ an article by Dileep Rao for StarTribune.com.