Tax cuts

Obama was in Michigan today talking about creating businesses and jobs to replace the ones lost. But, they want to keep raising taxes. Don't the Dems believe that cutting taxes will create jobs.Maybe they don't understand how a tax cut for the rich could create jobs. It just sounds like rich Republican talk to get their taxes cut, doesn't it?But recently, after reading about Obama's plan to raise taxes on oil and gas, I spent time explaining to a colleague that this would drive capital away from the pursuit of exploration and developmental drilling for oil and gas. The business is so goshdarn risky, and it takes years to even bring a discovery to market, it makes one wonder why anyone would bother investing in the industry. Or better yet, why would somebody's broker or financial advisor take the risk of getting sued by suggesting that a client put his or her money into the oil and gas industry? When clients lose money, they sue their brokers, you know.Does that explain how taxes reduce jobs? Taxes raise the cost of capital, which makes capital gravitate to other industries or countries where it is easier to earn a return on investment. So, when taxes are lowered, capital rushes in to go to work, and the creation of jobs follows right behind the capital.

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