Why does governments always need more and more money? Really, why?...I know the population is expanding, sure, but that means more productive citizens, tax payers, more money, right? Why does the government still need to raise taxes.
Years ago I read The 7 habits of highly effective people. The author, Steven Covey, talked about a concept he called the p/pc (production/production capability) relationship. The concept isn't new, in fact the story of the goose that laid the golden egg is a great example of this concept. In a nutshell you have a goose that can lay golden eggs, it’s in your best interest to keep the goose healthy, happy and productive because then the goose makes more golden eggs – win/win. In the story, however, the owner of the goose got greedy and decided to cut the goose open to get all the eggs but ended up killing the goose instead. To me, politicians are killing the goose (all of us) by taking more and more taxes.
The p/pc relationship is fundamental. The truly great companies go to extremes to keep employees happy healthy and loyal. As soon as the relationship is abused on a regular basis the company’s end is certain. Any good leader knows that this concept is vital. Good politicians know it to...,but there just doesn’t seem to be enough good politicians.
Take a look at my simple-minded breakdown:
1. Bubba and his wife Cindy Lou work at factories on opposite ends of town. They make a combined income of $80,000, $40k each to keep it simple. After a visit to the accountants office to get their taxes filed Bubba and Cindy Lou come to the conclusion that, after taxes and daycare, fuel for the vehicles, the time commuting, money spent on prepared meals, etc., they can actually save money if one of them quits their job to stay home with the kids. So they make the decision and baam!..., the economy just lost one citizen producing a product, paying taxes, buying fuel, etc. Win for Bubba and Cindy Lou, Loss for government revenue and the economy to.
2. In another example Bubba recognizes an opportunity to make some extra cash, but since his uncle Bo is an accountant Bubba asks for advice. Bo looks at the idea, crunches some numbers and figures, with the tax burden,that by working twice as many hours a day (increasing the amount of his personal workload 100%) Bubba might net a 30% gain in income after the business stabilizes. So Bubba decides that’s a bowl of brunswick stew (my favorite) he just can’t stomach. No increase in revenues, no production realized for the economy, just plain nothing, lose/lose.
Under a less punishing tax policy these two scenarios would happen differently and I know these examples are overly simplistic and the numbers are made up, but its the concept of it. When the government taxes, and taxes the goose, not letting the goose enjoy the rewards of her labor the goose grows tired, loses motivation and eventually fails to produce anything. No more golden eggs. On the other hand when the tax burden is lessened people see more reasons to be industrious.
So who wins with higher taxes. The politicians are the obvious winners. Let's face it they take a dollar from us (I wish ) and hire three people to spend it on something like trash pickup or health care. Things that private companies in ready supply will do. The person with the money wields the power and that should be us not our public officials.
So, why don't we say no?
Legislators in North Carolina are proposing a transfer tax on real estate. I feel like I pay enough already, when will they agree? I hear New Jersey is also proposing a transfer tax, why? Does it cost the state government money when real estate changes hands? These are questions we need answers to. Forget the the federal tax burden for a moment how many other states are proposing a similar squeeze as the ever increasing cost of our tax load continues to rise? When will it be enough?
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