To tax or not to tax: a question of freedom


One of the more pressing issues in Washington today is the decision of whether to allow the Bush tax cuts to expire or go forward for one more year. The Democrats say that these tax cuts should be extended, but only for certain people. The Republicans are saying that while they never agree that raising taxes on people is a good idea, this is a particularly bad time to raise them on anyone. Why would any politician support raising taxes, and if they do how do they get away with it?

As any 5th grader with an allowance, or a paper route, will tell you money equals power equals individuality equals freedom. Regardless of how the money is sent to the government, or who it is that sends it, the government becomes more powerful. The natural inclination of most is that if the government needs more revenue, it should riase taxes. Yet, it has been historically proven that when taxes are lowered more economic activity occurs. Democrats and media people apparently are not smarter than a 5th grader though, for they don’t know that more economic activity equals more money in the economy and more money equals more taxable revenue and more taxable revenue equals increase an increase of revenue for the federal government. If this is true, why then would any politician want to increase taxes: power.

The first question a Katie Couric style journalist asks whenever a tax cut is proposed is: “How is the government going to pay for it?” The answer is that the government doesn’t pay for tax cuts. They receive more revenue. Yet, a Katie Couric doesn’t ask the same question when a social expenditure is proposed, and the government does have to find ways to pay for them.

As we all know, Couric and her fellow liberals see the government as a charitable outfit that gives money to the poor. It relieves them of guilt to believe that their vote for a free spending politician will take money from the rich and give it to the poor. They believe that this will help them in their pursuit of Robin Hood status, in that they can stay rich without guilt, and they don’t have to give to charitable institutions as long as they continue to vote Democrat.

If this is their goal, they should probably turn to the 5th grader who has read the English folktale, for they would learn that Robin Hood actually stole from the government (i.e. the King) and gave it to the poor. They should probably also turn to the 5th grader to help them read the charts on charitable giving, for it would be pointed out to them that Americans are more generous with their money when taxes are low. The 5th grader might even point that the chart shows that Americans match and top the amount of funds the government gives to the poor in years where taxes are lower. The liberal responses I’ve received to this are usually: “Okay, but Americans are stupid. They don’t know what to do with their money.” Are Couric and her liberal friends ignorant of these facts, possibly, but only because they travel in very inclusive groups that believe these notions. You are not invited to these groups; you are the ignorant, the unwashed, the plebeians, the bourgeois, the proletariat, and the guys in red, and as any 5th grader who has seen Star Trek will tell you the guys in red always die.

To the guys in blue and gold, the guys in red are only in the script to define the evil nature of the monster or to make the guys in blue and gold appear more sympathetic to your demise. There may be a part of you that ascribes to the beliefs of the blue and gold because you want to be seen as one of them, but you’re not, and you never will be if they have any say in it. The guys in blue and gold don’t care about you in the manner they say they do. You are nothing but an anonymous credit at the end of the show to them.

Part of their script involves the sympathy, however, and we’ve all bought into it. We’ve seen, and heard, them tell anecdotal tales of some troglodyte (in red) who got stomped by America. We’ve seen their sympathetic faces when the camera returns to them. We’ve heard them tell us that the Republican Party and corporate America doesn’t care about you, but few of us see that they’re only trying to make their monsters scarier. Few of us see that they don’t give a wit about the troglodyte. They only want you to help them defeat their monsters.

The best way they’ve developed to defeat their monsters is to set their phasers on tax, yet corporate America doesn’t pay taxes. That’s right, corporations don’t pay taxes. But what about all the corporate taxes you ask. Well, corporations pass those taxes onto you, the consumer of their products. In this sense, corporations have become modern day tax collectors. They have accounting teams and tax lawyers to help them lessen their tax burden, and to do so they’ve found that the most feasible plan is to pass them onto you. You might say that this only provides greater definition of their evil nature, but they’re just as vulnerable as you are in their world. If they fail to show a profit for a quarter due to the fact that they didn’t want to be perceived as monsters, they’ll get fired by their shareholders. At that point, another monster will take over the CEO role, and he’ll see the mistakes made by his predecessor, and he won’t repeat them. He’ll pass these taxes onto you. The dirty little secret is that these sympathetic guys in blue and gold know this. They also know that they can get away with it, because you don’t know about it. You only know that you hate corporations, and you’ll elect any politician and tune into any news personality that continues to cheer on corporate taxation, but it’s you that’s getting taxed more.

Anytime a corporate tax is passed, a corporation basically has three different choices. The first option is to cut the corporate dividends. This will discourage investment in their corporation, and it could provide harmful news in investment journals that describe them as a company that may be falling on the wrong side of the tracks. Another option is to layoff employees to pay for this tax, but this could lead to damaging news that could also get them fired. Historically, the best–or least damaging–course of action has been to raise prices on the consumer. The corporation doesn’t increase their profit one dime as a result of this tax, for they cannot raise their price any more than is necessary to compete in the marketplace. You may have less in your pocket if you decide to buy the corporation’s products, but you don’t mind as long as they stick it to the them. The government doesn’t have more money, for as we’ve discussed more taxes generates less revenue for government’s coffers. The only thing that happens is that the power of the government is increased, for they get to dictate which corporation receives tax incentives and which corporations receive tax penalties. This decision is usually on what the “government dictates” as responsible behavior by a corporation. But a cynical mind might wonder what is deemed a “responsible” behavior when a General Electric receives numerous tax incentives. General Electric has been accused of toxic dumping in the Hudson River. One would think that even the suggestion of toxic dumping would prevent GE from receiving tax incentives, for that is not a corporation acting “responsible”, but General Electric donated to Barack Obama’s campaign.

On the flipside of the incentive/penalty debate, one would say that the penalties levied on Marlboro should prevent this company from extracting profits for their condemned actions. Yet, anyone who has followed Marlboro’s (Altria—MO or Phillip Morris International—PM) quarterly reports would know that these corporations rarely fail to report a profit for their investors. Their dividends are also some of the highest among blue chip stocks, and they have had no substantial layoffs in their corporate history. So, why do politicians insist on passing taxes (i.e. condemning) cigarette companies? First and foremost is the fact that they can get away with it. You hate cigarette companies. You love it when someone sticks it to them. Second, they cannot pass a tax on the poor. They would get run out of office so fast it would make our heads spin if they did. Who smokes though? In general, the poor smoke more than those in the middle class or the affluent, so passing a corporate tax on Phillip Morris is a win, win, win situation. They get the poor to pay more in taxes, they get a pat on the back for symbolically condemning the actions of Phillip Morris, and they don’t have to face the voters for passing the tax because everyone hates corporations and every hates cigarette companies.

Any 5th grader with a decent study of U.S. History could tell you that America’s greatness has little to nothing to do with its government. Yet, we’re ceding all of our freedoms to them. We’re allowing them to dictate which behaviors are good and bad, because we believe that they are the arbiters of fairness. We’re screaming: “Hey, no fair, Johnny has more than I do!” when as our mothers have told us we shouldn’t worry about what Johnny has. It doesn’t even seem to matter to us that we usually end up with less in the end as long as someone else has been gotten even with, and we thank those who get even with ’em by voting them into office to continue this cycle.

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