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Tax cuts often increase government revnue rather than decreasing them, and I am in favor of cutting programs and subsidies that eat up valuble budget capital. Of course I am not really expecting that the government will actually live up to promises of thriftiness and social program elimination, but I suppose the Republicans are going to do a better job then the dems. Back to the issue of tax cuts - a flat tax would be more fair, but if you think that Bill Gates is going to pay equal taxes, then you are simply kidding yourself. The reason that he pays less taxes is that he employs the same vehicles for tax free saving and investing as is available to the rest of us; but he has a bigger stake in investment and a higher disposable income that he needs shelter from.
For example, lets just assume some numbers: His salary income is $5,000,000 and the remainder of his net worth is in M$ equity holdings of which he just paid himself a huge dividend amounting to $2 billion and the other 45 Billion is in common stock (of which there has been no gain in share price). Since there has been no gain in stock value, he won't pay any capital gains tax. Since the new dividend tax repeal, he won't pay anything for the $2,000,000,000 that he will likely reinvest in something that keeps him from paying taxes. And of the 5,000,000 slary, his deductable expenses amount to 3,000,000 - leaving 2,000,000 of taxable adjusted gross income of which he is smart enough to invest $1,000,000 in a tax free IRA, Trust fund or other reirement/estate planning fund that will defer taxes until the funds are removed. This leaves $1,000,000 that is subject to the 35% tax rate for his income bracket. So, he pays $350,000.00 in taxes which is really only about 7% of his adjusted gross income. Fair and square, he paid this amount which is certainly more than you likely even made - and assuredly more than you paid, in fact it is likely that you could increase your tax burden by a factor of 20 and still be under what he paid. Here's the reason - disposable income.
If you make $50,000 and you only have deductions amounting to $10,000 then your adjusted gross income is $40,000 but of that you can't afford to put the money away for savings, instead you have to spend it to live on so you in turn pay taxes on that same sum - $40,000 at the 29% bracket = $11,600.
I realize the disparity here that you who can't afford to save has to pay a larger percentage, but that does not count the pther factors, like that Bill paid sales tax on the stuff he bought for 3,000,000 (@8%) = 240,000... and this doesn't even count the fact that his investments in the stock market/mutual finds are putting money into american's pockets in the form of corporate profits that are taxed, increases in the stock market that help everyone. Lets also consider the firm which he employs to invest the money that take a percentge for themselves in order to pay employees and keep running (at a profit) which is taxable also. So if you totaled it up, his tax relief comes at a huge profit for the government and the conomy as the trickle down effect shows - that seems a bit more fair now for him to pay less.
More on tax cuts making more reveue later. For a preview, look up Reaganomics.
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