Tax Cuts, Tax Hikes, All Taxes Go Fly a Kite!
Extending the Bush Tax Cuts has been all the talk lately. It looks like we will get a 2 year extension of the Bush era tax cuts with the deal apparently being made, by also extending unemployment benefits even longer.
Are you one of the many people who scratch their heads and wonder how it is our governments tax us so much? I am. Where exactly does it say in the Constitution that our government can make us pay income tax, gasoline tax, sales tax, tax on business inventory, tax on alcohol, tax on tobacco, tax on certain business activities, higher taxes on more successful earners, tax on fatty foods... the list goes on and on.
Just for the record, you can't tax or legislate morality, and government "sin" taxation is nothing more than government greed and government control run amok.
The most preposterous argument I hear against tax cuts is that it will take money away from the Government, that it will cut the revenue stream. I'll get back to this, but this is just plain stupid.
Government Heroin Addict Prostitute Tax Pimps
Here in North Carolina we have "Internet Sweepstakes" shops that some people want to put out of business because it's very similar to gambling. These businesses get past the anti-gambling laws by the way the software works. So a law was passed that will shut them down at the end of the year, but my understanding is that they can tweak the software again and get by the new law. I was listening to the news on the radio and heard an elected state official saying that we should not put them out of business but rather regulate them and tax them, because this would create a new source of revenue. This really, really made me mad.
We do not live in a dictatorship. This is not a kingdom where we are subject to the whims of a king. This mentality that the government has the right to tax any and everything they want to has to stop, and NOW. We need to keep cleaning house until there is NOT ONE idiot like this left in office. Elected officials who think that the government has the right to tax any and everything they want to are no different than crack addict prostitutes trolling truck stop parking lots: they're addicted and looking to score.
Common Sense vs. the Educated Man...
I think one problem is that there are too many "educated" people in economics and politics. I previously explained how I can prove socialism sucks for just 25 cents, and I don't have a degree in political science. Now I'm going to explain why taxes kill revenue, jobs, and the economy. This is also why "the Liberal Left" is scared poopless by people like Sarah Palin - a little common sense at the top is like shining sunlight in a nest of roaches, they'll scatter like the pests they are!
The Economy is Like Flying a Kite
Have you ever flown a kite? Unless you're in a really windy location like the beach, it can be really hard to get a kite airborne, but once it is, generally speaking, the higher you let it fly, the stronger it pulls because the winds are stronger the higher you go. In this analogy, a really windy location would be like selling burgers to a really hungry crowd: most of the time you have to work a little harder to get your kite in the air.
Here comes Uncle Sam
So along comes your friendly government official and explains to you that you can't fly your kite like you are doing, that you have to have to hang a 3 ounce fishing weight on it and that you have to pay for the government for weight (it's a special one, made by union employees). So you reel your kite back in and somehow manage to get it airborne again even with the 3 ounce fishing weight tugging it down.
Pretty soon, the government official comes back by to check on you and finds that you're using 1000 feet of string and has news for you. For every 100 feet of string you use over 500 feet you must add 1/4 ounce of weight and if you go over 1000 feet then for every 100 feet over 1000 feet you much add 1/3 ounce of weight and if you somehow manage to get your kite 2000 feet in the air you must add 1/2 ounce of weight for every 88 feet of string over 2000 feet.
So you roll your kite string back in and add the required weight. This time you can barely get it airborne. It's really struggling and wobbly but you run and run and run and finally get it into strong enough winds to just barely hold it in the air... just barely.
You get a cold drink and wipe the sweat away and wonder just how long your overloaded kite can remain airborne.
You're Using Too Much Air
The next day your kite is somehow still airborne and you're thinking about launching another one when who should come visiting again but your friendly elected government official. It seems that you're using too much air and that because your kite is airborne you could be blocking the wind from some else's kite so you either have to cut 4 1" holes in your kite, or, attach a booster string to help other people get their fishing weight laden kites airborne.
You're also informed that the government has decided that if the wind blows above 10 mph you will have to pay a wind tax of 1 cent per hour, per mile per hour, over 10 mph... unless the wind blows from the Northeast and in that case it's 1.4 cents per hour, per mile per hour, over 16mph. (note that the wind in your area primarily does blow in from the Northeast by the way).
You Have Too Many Kites
During his last visit, your friendly elected government official noticed that you had 14 rolls of kite string, 2 rolls of silk cloth, and a whole box of wooden kite sticks. You replied that you stocked up because your supplier was having go up on his prices because he was now required to give the government 1 out of every 10 rolls of cloth he wove, 2 out of every 15 rolls of string he made, and 1 out of every 9 kite sticks he cut.
Your comments were met with a long glare and you were ordered to pay a fee for the excessive stockpile of kite making material that you had accumulated and apply for a license to fly your kites. You will also have to submit an environmental impact statement once a quarter to verify that you've not damaged the air quality.
Shutdown
At this point you protest and file a complaint stating that there's no way your kite can fly with holes or a second string that's used for pulling up someone else's kite. Overnight your kite string is cut and your kite falls out of the sky and is lost. There's a note left by the government policy enforcer stating that you did not share the correct portion of the lift you were getting from your kite with others and with the government, so your kite flying operation was shutdown.
Cousin Joe
You hear from your mother that your cousin Joe has taken his kite to another country to fly, a country that does not require you to have so many fishing weights on, or so many holes in your kite. You'll miss flying kites with Joe but you understand. A month or two later, you get a letter from Joe saying that a lot of your old kite flying friends are there and encouraging you to come too. He tells you that he has 20 kites in the air and plans to launch more. Because it's easy to fly kites here, he's had the time and ability to help others learn how to fly their own kites too. Plus, he regularly donates some of his lift to help a group of disabled kite flyers and has built a shelter for a homeless flyer (and even gave him a kite to fly).
Why Can't They Understand?
The kites in my example are businesses, big and small all the way down to single entrepreneurs. The economy is made up of all the kites, big and small. Each kite can generate lift and even hold up a small fishing weight. Why can't Democrats and liberals understand you can't put much weight or much of a hole in a kite before it will not fly? Take the excessive weights off and the kites will soar. When you take the excessive weights off even more kites will be launched, creating a kite flying bonanza.
What's The Solution
This is a simplified outline, a high level view so to speak.
- Eliminate all the current tax codes, loop holes, exceptions, and convoluted tax laws.
- Adopt a flat income tax. The combined flat income tax (meaning federal, state, local) should not exceed 25%; this includes all forms of earning, paycheck, investment, interest, capital gains, etc.
- Investments held for longer periods of time will qualify for a reduced tax amount.
- The maximum rate would remain at 25% for 6 years and then reduce to 20% over the next 4 years.
- Adopt a low federal sales tax. The combined sales tax rate (again meaning federal, state, local) should not exceed 10%
- No new taxes or changes to the tax laws could be enacted without ballot approval by the people.
- No taxes on businesses - unless the income tax is cut in half or eliminated. In that case, a low income tax on businesses may be applied.
- The budget must be balanced.
That's it. No business taxes, no inventory taxes, no gas taxes, no "sin" taxes like tobacco or alcohol, no inheritance taxes, no other taxes (that includes fees and other trick taxes).
The Result
Business would take off like crazy. People like Cousin Joe would move their businesses and manufacturing back to the USA. Jobs would be abundant. The economy would soar.
Why Not Tax Businesses?
You may be wondering why I don't want to tax businesses, or tax them at a very low rate. Business is the engine that drives the economy and I want the motor running at full steam without impedance.
If a business has profits and has cash reserves, what does it do with that money? Most will invest in new business operations, or put it in stocks, the bank, or other investments... those funds are then reinvested by the institution holding them... this in turn creates more businesses, which creates more jobs, which creates more paychecks, which creates more revenue for the government.
What about Cousin Joe, Cheaters, or Businesses that Horde Cash?
Most people really don't want to cheat the system. If taxes are low and fair then people will pay them. There won't be any reason or incentive to go out of the country to manufacture goods or hide your money. Sure some people will always try to cheat, even when taxes are low. Cheaters should be caught and dealt with.
However, if a business, or individual, wants to store money they've earned and not reinvest it, that's their choice - the government has no right to tell me, them, or you that they can't. If I start a successful business and earn 15 million dollars and choose to store 10 million of it in my barn in boxes of $100 bills then that's my business and I should have the right to do so. The government has no right to tell me I can't, or to make me pay some form of tax on my money. For the most part, hording like this will not happen because that money is not working, it's not earning anything and people and businesses want their money working for them.
What Will Happen to Government Revenues?
They may drop at first, but after two or three years they will Go up!
What Will Happen to Unemployment?
Go down drastically!
What Will Happen to Personal Income?
Go up drastically!
Until next time,
Fred
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Posted by Fred (aka Recoil) on December 8, 2010
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