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PROSPERITY: Economic Policy | January 25, 1993


An Unpublished Letter to Los Angeles Times

If those whom we have elected elect to enact regressive taxation, by any name whatsoever -- sales taxes, consumption taxes, value-added taxes, energy taxes, "sin" taxes, users fees, or even lotteries -- then they will accomplish exactly three things:

1) They will break faith with the very people who have entrusted to them the powers of state.

2) They will institutionalize the injustice pioneered in the 1980s, by shifting tax burdens from the rich to those who must spend -- rather than can save -- the lion's share of their income: Namely, the poor and the middle class.

3) They will "kill the goose that lays the golden eggs", by taxing personal consumption -- constituting two-thirds of the Gross Domestic Product.

The only fair and wise way to raise revenue is via progressive taxation, typically a graduated income tax -- exacting the greatest sacrifice from those most able to afford it and the least, from those least.

Personal saving is, of course, to be desired; and cutting the national debt, imperative. However, the only sustainable way to generate monies for such purposes -- and the only sustainable way for businesses to repay, with interest, loans made from any savings -- is by revitalizing the economy.

And as any kid with a lemonade stand can testify, you can never make more money than you can take-in from sales: The economy is naturally demand-sided. For the good of all citizens -- corporate "citizens" included -- let's relegate this "supply side" nonsense to the compost heap of history once and for all...before it's too late for us all.

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