June 2, 2010

Taxes are collected by Governments. This is not a voluntary contribution, so there is no way you can call it charity. The welfare state robs Peter to pay Paul. Robin Hood rules in city hall, the county seat, the state capitol and Washington DC, and oh, yes, the UN and the World Bank

Government has a monopoly on taxation. Any competition in this racket is called extortion and the culprits are sent off to prison. Just like the Government monopoly on counterfeiting money.

Taxes are supposedly necessary to pay for the services provided, namely:
Police Protection
The Justice system: courts & prisons.
National defense.
Streets and highways
Legislatures- our elected lawmakers
Executives: mayors, governors, presidents.
Bureaus & Bureaucrats
Foreign aid
Pork Barrel (A little subsidy for my friends and voters)

A long list? I’ve probably forgotten quite a few; you can add any I’ve missed.

All these things cost a lot, and we’d probably rebel if somebody sent us a bill for the total once each year. So they spread it out and around and you pay it in smaller lumps by painless payroll deductions and by all these different routes:
Federal Income Tax
State Income tax
State & local sales tax
Property tax
Import tariffs
Corporate tax
Inflation, the stealth tax
License fees: auto, marriage, dog, Etc
Have I missed any?

The questions forever worked over by Economists are: How fair is this or that tax? What are the good and bad effects of each one? Couldn’t we select the one ‘fairest” type of taxation and collect it all that way? It’s useless to argue, for politically it is most important that no single tax shall seem painful enough to cause a taxpayers’ revolt. The market, however, manages to adjust to all taxes with the effect of shifting the tax burden to the consumer, along with all other costs of production. That’s logical, because the end purpose of all the parts of the economy is consumption, so the consumer pays for all of it.

The more avenues of taxation, the better the politicians like it. And the one they like most is the stealth tax: legalized counterfeiting, which with the help of a little misinformation, can slip below our radar screen, unrecognized as a tax. They call it “fiscal policy” or “deficit spending”.

Let’s face it; the best tax is no tax. We’d all like that, except for the politicians and the bureaucrats. You wouldn’t want them to have to go out and earn an honest living, now would you?


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