The abysmal economic ignorance of political leaders who vote to tax their constituents without any understanding of the impact that taxes have on the economy and employment is stunning. They just don’t get it. They seem to have the mistaken notion that money the government uses to pay for programs or provide benefits to individuals and various groups is produced by the government when, in fact, it comes from taxes. And the more taxes are increased, the less there is for taxpayers to spend or invest.
Pardon my skepticism but, try as I might, I can’t see any reason why it’s always necessary to raise taxes and fees whenever the government is faced with a budget shortfall. Given the size of budgets these days, especially at the state and county levels, it’s hard to understand why legislators invariably look for ways to increase taxes and generally resist cutting costs until they are forced to do so.
With all levels of government competing for new sources of revenue, it seems obvious that we are rapidly running out of options, yet our politicians insist on continuing to paper over the deficits, which seem to get bigger with each fiscal cycle. John Stossel points out in a Nov. 18 column, “Worse Than Taxes,” that New York now has a $3 billion deficit, but that the state would have a $14 billion surplus today, if the growth of government had been limited to the rate of increase in population and inflation.
“Hidden taxes are more pernicious because they disguise what we pay for government,” he writes, adding “Politicians are worse than thieves. It’s not that taxes don’t anger me. They do. But I’m more angry about the arrogance of the ruling class.” The state of California is notorious for its out-of-control spending and deficits, and the Sacramento Bee reported (Nov. 19) that the state will require $20.7 billion to balance its budget over the next 19 months.
I have always been baffled that so many otherwise seemingly intelligent, responsible citizens, who probably generally use good judgment in the management of their own affairs, seem to lose all sense of proportion when they get their hands on government funds. It almost seems as if it somehow becomes some sort of Monopoly play money. The healthcare bill currently working its way through Congress further illustrates the zeal of legislators to impose more taxes on Americans.
The Heritage Foundation provides a list of 29 new taxes that are currently included in the plan (heritage.org/Research/HealthCare/wm2706.cfm): An income surtax on taxpayers earning over $500,000 a year; an excise tax on high-cost “Cadillac” health insurance plans; an excise tax on certain medical devices; a limit on itemized deductions for certain taxpayers; a windfall profits tax on health insurance companies; a value-added tax (VAT); and an increase in the Medicare portion of the payroll tax, among others.
“The full list of taxes proposed to pay for healthcare reform is provided because taxes currently left out of the Senate or House bills could reappear at any point,” The Heritage analysis further notes. “For instance, the tax on cosmetic surgery listed above (sometimes called the ‘Botox tax’) was written off long ago as a laughable way to pay for healthcare reform. Nevertheless, it somehow found its way into the current version of the Senate bill. … As the legislative process continues and Congress’s desperation to pass a bill increases, it could propose even more tax hikes to pay for its massive expansion of government size and power ... ”
This appalling example of the excess of legislative zeal to impose taxes further illustrates that the reason our taxes have been increasing exponentially over the years is because the people who are elected to represent us keep voting for them, which amounts to “taxation with representation.”
© 2009 Harris R. Sherline, All Rights Reserved Read more of Harris Sherline’s commentaries on his blog at www.opinionfest.com