Finance - Taxes Destroy


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July 23, 2021 by Scott Crosby - Views: 24

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Finance - Taxes Destroy

S111-1.jpgTaxes destroy. 

Want to really hurt the segment of the population just above the poverty line – the people who have the most difficult time keeping a job, making ends meet, keeping the car running, and keeping a roof over their heads?  Raise taxes.  Works every time.

So why do we have taxes?  What is the benefit?  

In a word:  freedom.  Taxes pay for the government.  When that government protects our freedom, it makes a good life possible.  Government prevents those who would hurt us – outside invaders and criminals within our borders – from doing so, and from taking the things we have each built to make a better life.  Government’s role is to protect our “life, liberty, and pursuit of happiness”.  “Pursuit of Happiness” is the economic well-being of each of us, our families, our friends and neighbors, and those who make the things we want to buy.  

Those who live in towns and cities also pay taxes to support the services we all need to keep the town livable and attractive:  paved roads, trash pickup, sewers, a water supply, police, and fire.

Like any taxes, even those kinds of taxes hurt the people nearest the poverty line.  But without those taxes, their living conditions would be worse.

But there are always those who claim that with just a small increase in taxes, we could “help the poor”.  Unfortunately, each increase in taxes just raises the cost of living above what some people can afford.  All the programs designed to help the poor by raising taxes just increase the number of people actually living in poverty.  Each tax increase moves a new group below the poverty line, while raising the cost of living for those now only a single step above the new poverty line.

Using the government to “help the poor” is a never-ending death-spiral of economic decline.

At some point the damage being done to people by the increased taxes becomes too evident, and politicians begin losing elections.  The solution seems clear:  don’t tax the poor.  Use a graduated set of tax rates.  “The rich have money; they can afford to pay the taxes needed to help the poor.”

But the “rich” are the ones who have built the businesses that employ others.  The “rich” make jobs available to others.  Each job costs money – money which the company has to have available to spend.

If the “rich” who are now required to pay more taxes include the husband-and-wife team that owns a store, then the increase of taxes mean they will have to reduce the number of people they employ to help out.  If previously they employed two full-time employees and one part-time, they can now only afford one full-time employee, and one part-time.  If they let the part-time help go, and reduce one full-timer to part-time, two families are hurt.

Higher taxes did that.

The factory down the street that employs a hundred people still looks as solid as ever.  They have ten staff employees, and are running three shifts of thirty workers each.  But the higher taxes take a toll there, as well:  three workers on each shift are out of a job, and two of the office staff suddenly find themselves unemployed as well.  

Higher taxes did that, too.

Not only are all those families who had been employed at stores and factories hurt, but with fewer people paying taxes, less tax revenue is available to “help the poor” – a group now made larger  due to those people that businesses can no longer afford to pay.

Businesses and stores do not usually claim they are “helping the poor”.  Regardless of how successful they appear, a business is in a continual struggle to stay in business; to be profitable.

But if there is ever anyone who should be acknowledged as “helping the poor”, it is businesses.  

Then what does anyone gain by government efforts to “help the poor”?

The greatest benefit for such a program is enjoyed by the politician who voted for it.  He can then ask those poor who are receiving money from the government to vote for him in the election.  Voters often fail to see the connection between taxes and economic well-being, and will vote for the politician that helped them get the money they needed.  They do not vote for the politician who voted against “helping the poor”;  he looks like the villain.  They have not made the connection that the higher taxes have put them out of work.  

The politician who voted to “help the poor” is the big winner.  His greater influence over a bigger group of voters feeds his ever-greater desire for more political power.  History is replete with politicians who use poverty to take control of the government.  

Vote for higher taxes:  “Help the poor” – and your friends, your family, and yourself – to be pawns of power-hungry politicians.?

 

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