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To: jttmab who wrote (14600)	6/10/2002 2:11:12 PM
From: TimF	Read Replies (1) \| Respond to of 21057

"... it would create a greater possibility of more people accumulating wealth." The last half I would not agree with. If you consider the dispersion of income/wealth in the current tax system, I think you'll find that the upper end of the income spectrum is increasing at a higher rate then the middle or lower income. It doesn't seem logical that a reallocation of tax burden from the higher end, to the middle or low end would result in those groups having greater wealth accumulation. [assuming a revenue neutral change]. People at the bottom are not likely to be able to accumulate wealth unless they have jobs. Reducing the incentive to create wealth by increasing marginal rates reduces the number of jobs that are created. Reducing marginal rates will help the economy grow. Also I was talking about simplification as well as rate reduction. IMO simpler taxes will also help the economy grow. The lower and simpler taxes are the more people make investment decisions based on the return from the investment and the less they make them based on tax advantages. High and or complex taxes distort the incentives for investment to promote seeking tax shelters rather then seeking profitable and efficient ways to invest money for maximum return. In any case we were talking about people acumulating wealth. Once people's income increases and they start to accumulate wealth they pay the higher rates. High rates for the upper income brackets act as a disincentive to the effort required to accumulate wealth. The second suggestion...well I didn't say that reducing the size of government would be easy, or even that I think it will happen, I was rather talking about how I think things should be. Unfortunately in reality government has a strong tendency to grow and it is dificult to restrain let alone cut back. Tim