The Stimulus Package

[Jason1]

I just believe the stimulus will do what they say it will do. For starters, the infrastructure spending is much needed. I also love the money being spent for renewable energy, far too long we have known our dependence on foriegn oil has been a problem yet we have done little to nothing about it. Of course the other things which I would rather not go into detail, are mostly good too. These things will create jobs hopefully soon. Will it be enough to quickly end the recession and see the DOW rise to what it was in 2007? Hardly, but hopefully it will save people's jobs. At the very least, it will do worlds better than just ignoring the problem and giving the rich more tax cuts, which is what John Mcain would have done. How can the Rupublicans get upset over this spending, when they themselves spent ungodly amounts on an unneeded and unnecessairy war. We need to spend a little to get out of this mess that THEY created!

I have a conservative professor who said as he watched the speech last night his wife was furious when Obama again mentioned the tax raise for the wealthy. She claimed that just because they worked hard, got an education and have been successful they shouldnt have to pay more taxes than everyone else. I honestly understand that opinion, but my thinking is that rich people wont suffer from paying more than poor people, and its for the good of the country. This professors wife was also born and raised in Germany. If she dosent like it, go back to Germany I say.

[Professor S]

First I'd like to thank you for your thorough and level headed response.

I understand why you would want the rich to pay a higher percentage than the poor, if in the end the result was higher revenue to the government. But according to the CBO charts Bond posted earlier in this thread, thats not the case. Revenue actually increased a percent when taxes were lowered on the wealthy. The leading explanation is that when taxes or lowered, more wealth enters the economy and in the end more revenue is created by taxing more wealth less.

Lowering capital gain taxes has been proven to increase revenue to the government by more than that.

So my question is this: If raising taxes lowers revenue in many cases (not all), then to what end do we raise those taxes? Is it fairness? If so, is the purpose of our tax system a means to exact social justice, or solely a means to create revenue to run the government?