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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Economic prosperity follows the path of least resistance- it always has and it always will. When we keep 100% of our income, we are free to use all of it to meet our needs and wants. The more income that we loose to taxes, fees and red tape, the less economic freedom we have simply because we have less money to spend on our needs and wants. This means that the more income we are forced to surrender, the more our choices begin to narrow in the marketplace.
We might be able to spend $100 on healthcare, car repairs, utilities or food but when $25 of the $100 is taken from us, we have to find a way to make the remaining $75 meet the same needs and now we have less freedom of choice in the marketplace. If we have all of our $100 taken from us than we have no freedom over our economic choices because we have no money.
Economic prosperity follows the path of least resistance.
Government should let people keep more of their own hard earned money rather than just paying more taxes, fees and costs associated with mountains of red tape. When people are allowed to keep more of their own money they have more freedom and more choices available to them in the market place. This drives competition which lowers prices and increases quality of products and services. It always has, it always will. Freedom works.