Conservative News & Commentary

Jun 4, 2012 — by: A. Smith
Categories: Economics, Government

Monopoly-manSometimes when I hear liberals talk, there is angst against corporations, and sometimes individuals, who make too much money. (First I wonder what their definition of "too much" is. Second I wonder why liberals get to determine any amount at all.) This type of discussion usually arises when trying to figure out how to raise more money for government. According to liberals, the best way  to achieve this goal is by raising taxes on the wealthy — people and businesses alike.

Taxes are a penalty on productivity. If you don't think so, just look around at the wide offering of tax accountants available to help figure out how to pay fewer taxes. I have yet to hear of an individual or company that hires a tax accountant to help them pay more taxes. People and businesses alike do as much as they legally can not to pay taxes. Why? Because, taxes are a penalty on productivity. 

Question: If you want to encourage more of a particular activity, would it be wise to penalize that activity more or to reward it more? Obviously the right answer is to reward the activity you desire. This simple logic is found in training a dog, raising children or coaching a sports team. Discipline and correction follow activities that are undesirable, but rewards and praises follow activities that are wanted. Therefore, if taxing is a penalty on productivity, then what does raising taxes do? Does it increase productivity or decrease it? Answer: Raising taxes decreases productivity.

With the City Schools Levy passing on May 15th, which business in Klamath Falls will now think increasing the value of their property is a good idea? With higher city taxes which corporations are now more inclined to open a business in Klamath Falls? 

County Government receives a bulk of its budget from property taxes. By raising property taxes, all businesses in Klamath Falls have been told that more of their profits will taken away for city schools that may or may not be managed well. So any type of construction to a building which would increase its value is now far less likely to happen.

Instead if the goal is to increase revenue for government budgets, taxes need to be decreased, not increased. Lowering taxes rewards productivity. By rewarding productivity, more productivity is achieved. More productivity leads to higher profits. And higher profits translates into more money for government — even at lower rates.

Do you think Google, Apple or Amazon would have located their data centers in Klamath County if our property tax rates were significantly lower than our neighbors to the north? Do you think lower property tax rates would have made a difference for Costco or Lowes opening stores in our county? Do you think Onex Corp. (who owns a majority stake in Jeld-Wen) now thinks keeping Jeld-Wen's headquarters in Klamath Falls is a better or worse idea? Our bureaucrats continue to trust the myth that raising taxes (in the form of special levies) is the answer to all their financial problems. What these geniuses fail to grasp is that with each increase they decrease the incentive to produce wealth and therefore make our situation worse. It's like digging a well deeper and deeper only to run into the eventual truth that there is no more water.

Government depends on businesses being profitable. Without corporate profit, there is little funding for government. Raising taxes is not the right answer to funding government. 

1 Comment

  1. Finnious T. Fogbottom ~ Jun. 20, 2012 @ 11:11 am

    I think it would be nice if logic did finally prevail and the tax vampires came to the wise conclusion that they need to act more like sales managers than prison guards. Can you imagine how hard it would have been in the old days to effectively deliver news papers if prison guards ran the show? Instead of putting up with all of “that” the newsboyz would’a probably made the news as they turned to lives of crime in frustration. As it was though there was incentive and competition which brought on that ancient situational phenomenon known as WIN WIN and as a consequence kids got paid and the papers got delivered on time. Now kids usually aren’t allowed to work, most papers aren’t worth delivering because intelligent people don’t believe them anymore, the prisons are full, we need prison guards in our schools, we can’t afford to have guards in our prisons and the bulk of government treats its business population like criminals that should be in prison. For sure, I think it would be nice if logic did finally prevail and the tax vamps came to the wise conclusion that they need to act more like sales managers than prison guards. Finnious #

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