What exactly is a tax an income? Most people understand income taxes to simply be a tax on wages and although that is a true assessment, I would argue that income taxes represent a lot more than the government taking a few dollars out of our paychecks.
Let me explain this. If I were going to pay you to mow my lawn, we would first have to agree on a price for your labor. You might look at my lawn and consider things like risk after all, there are going to be blades spinning near your feet. You might consider the time involved and maybe even how miserable it be to mow a lawn in the middle of summer when the temperature is 105 degrees. Lets say you agree to mow my lawn and considering the risk involved, the hot sun and assuming the job will take you an hour, you ask for $20.
After my lawn is mowed I give you $20 that you carry away and deposit into your bank. That $20 isn’t just a paycheck. It represent much more than a number in fact it’s direct manifestation of your labor. That $20 represents the value of an hour of your time and productivity.
When the government taxes your $20 then, it is really taxing your labor and productivity. Fundamentally speaking, an income tax is when the government is charging you for your productivity and time. If the government charges your time and productivity is too high in Missouri for example, it only makes sense that you might consider finding another state to be productive in; another state that doesn’t charge you as much for your own work. States that cooperate with your productivity are likely to have more prosperous economies than states that compete with your productivity.
"That $20 isn’t just a paycheck. It represent much more than a number, in fact it’s direct manifestation of your labor. That $20 represents the value of an hour of your time and productivity. "
When legislature begin to discuss tax reform and policy geared toward economic development, it is important they understand these simple principles and they really are simple:
Money works a lot like food, when the government devours more and more of the peoples money, the bigger the government grows and the less productive the people become for themselves; the more money people feed into their local economies as they buy and sell things to meet their needs however, the stronger our local economies grow. Lower taxes stimulate economic growth.
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Somebody asked me today to tell them a little bit about my NO vote on the "Pick a Winner" tax credit bills we had in special session. I talked with the reporter and then decided to tell you what I had told her.
If you have read my previous article on the principles of economic freedom you will see that this recording is much the same as the article. Hope you like Knight Rider.
I just voted NO on the "China Hub" bill in the Committee on Economic Development. It seems that to compete with other states for economic development and job creation, many are under the impression that we have to do what everybody else is doing but just do a better job of it. Maybe that is the reason why I often hear people say "Well, we have to do something!" when they tell me that they do not like these targeted tax credits but they are going to vote for them anyway. Although the Aerotropolis bill is far from anything I consider to have true economic potential, parts of it are better than what we were given in committee before.
CORRECTION from earlier post: "Compete Missouri" is not in this bill as it was first proposed but some of the items still remain to my understanding (I am still trying to figure this out, we just got the bill the other day already had to vote on it without any debate in the committee itself).
There were Four NO votes on this bill in committee:
Targeted Tax Credits and the Principles of Freedom
The proper role of government is to protect the rights of the citizens. This means, among other things, that the government must keep us safe from invasion, protect our inherent rights such as our freedom of speech and our property. It takes funding for the government to protect our rights but when the government begins to reallocate the people’s money beyond their jurisdiction, their acts naturally become counterproductive to the purpose of government and become dangerous to our liberty, our treasury and our ability to pursue happiness with the confidence that we are all equal under the law.
I AM NOT AGAINST PROPER AND REASONABLE REGULATION IN THE MARKET AS LONG AS THAT REGULATION IS DESIGNED TO PROTECT THE INEGRITY OF THE MARKET SYSTEM BY PROTECTING THE PROPERTY (MONEY AND LABOR) OF BOTH CONSUMERS AND PRODUCERS.
Here are some freedom-minded bullet points on sound economic principles:
• When the government targets certain industries for tax credits in hopes of spurring economic prosperity, the government is either implying that it can predict supply and demand for goods and services, or it is attempting to suspend the laws of supply and demand altogether in favor of central economic planning, both of which are bad policy and rob the people of their liberty and property.
• When the government targets certain industries for tax credits, it is basically admitting that letting that industry have more money is a good thing that will spur economic growth. The problem is that the government is picking who gets a greater opportunity to succeed at the expense of the others, possibly even a small businesses competitors and thus there is no equality under the law. That notion alone is enough to make this a civil rights issue.
• The government is literally robbing the labor of the people through their tax money in an effort to assist others in their labor and pursuit of success. This is an outright abuse of our property rights and not only that but we are implementing the basic tenant of socialism to do it insomuch that we are advocating the imperfect implementation of collectivist principles in hopes of attaining a healthy economy.
• Another point to make is that there is no equality of law under such a program when one is forced to pay taxes so that a competitor may not pay taxes.
• Good and bad investments in our economy can only be properly determined when consumers and producers are free to make their decisions without interference of intrusive government policies that distort the pros and cons of the investment.
• The markets do not become more free when the government gets involved; they become less free. It is important to keep the government out of the market except when they are needed to protect the rights and property of producers and consumers.
Economic prosperity has always and will always follow the path of least resistance. Bottom line: If we want to bring back the jobs, we need to cut taxes and red tape equally for everyone and get the government to STOP planning the economy. Let the market and investors, consumers and producers work it out. That is the system that brought us the toaster, the lightbulb, the plasma flat screen TV and the Macbook Pro that I am typing this on. Let's try that system again and see what new ideas can come out of Missouri!