TAXES ARE KILLING US

Posted: September 14, 2014 in Uncategorized
Tags: , , , ,

In the whole scheme of things, taxes are a necessity to running a successful country. When a tax is levied at a specific rate the original concept is that this income is adequate to fund a service or group of services that are required by the citizens that are being taxed. An alternate to taxation is pure socialism or communism where a person works and the government keeps all the income and thus provides everything for the citizens. While this may sound utopic it does not reflect human nature and suppresses a person’s ability to aspire to achieve great things and thus assist with the growth of a country.
America has been an economic leader in the free world and our approach to building wealth and allowing free thinking has been a magnet to draw talent and funding to our great nation. Over time we have continued with the programs that require the country to provide more and more services to the citizens instead of the citizens providing for themselves. This is a slow roll toward socialism and the additional cost of these programs must come from taxes. Unfortunately, over time programs become more expensive due to expansion of the program and the ever-present inflation. A well designed tax program would take that in to consideration by evaluating how much additional revenue will be brought in due to economic growth. This is usually not the case so additional funding comes instead from levying more taxes. Instead of managing the funds received we just increase the taxes; and this is leading to a major economic dilemma.
Our county is struggling with infrastructure that has served us well for over half a century but which is now beginning to be beyond repair and which must be soon repaired. Money that was originally ear marked for infrastructure is now going to social programs. So how to get the money to fund these necessities to society. Many will view this as a need for even more taxes or borrow money that will leave our children and grandchildren with so much debt that they should disavow ever knowing us. Of course the government could print more money and we could return to out-of-control inflation. So here is what is developing and if this problem continues we will become the late great United States of America.
We have to think progressively. If we want industry to flourish in America we have to make America attractive to industry. Just because we are the USA, this is no longer a guarantee that industry and corporations will form or for that matter, remain here. I heard a story that Halliburton was relocating corporate offices to Dubai. There is nothing more American in nature than Halliburton. Now we hear that Burger King is trying to buy a corporation in Canada with the purpose of moving the company to that tax friendly country. The reason they are leaving is due to America having one of the highest corporate tax structures in the world. This is just the tip of the ice berg and in an effort to keep this from happening the federal government is proposing punishments for countries that are leaving America. So what we have here is an environment that is adversarial for corporate formation and growth. In this case, we need to bite the bullet and plan for the future. Reduce the corporate tax rate and thus encourage companies to locate to America. It will take a couple of years but the future will be much brighter for our country. We have to forget this punishment for countries that are leaving. If the business environment is good they won’t want to leave. Coercing a company to stay will lead to backlashes in the future.
We also have to manage to what we have today. There are going to have to be some hard decisions to be made with how we spend our tax revenue. Government managers have to be held accountable for what they have today instead of increasing tax rates. Encourage spending by corporations to expand their businesses and provide more money to individuals to spend by reducing tax rates. This is some tough love for our country. Then the economy will expand due to natural economic factors and not artificially due to government control.

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