- The Washington Times - Tuesday, February 2, 2010

ANALYSIS/OPINION:

In his State of the Union address, President Obama accused George W. Bush of fighting a war he was unwilling to pay for, meaning he was unwilling to tax citizens for the war. In truth, everyone who gets a paycheck knows he or she was being taxed for it.

There is a natural law of economics that politicians are unwilling to recognize, and it goes like this: Increased tax rates mean decreased economic activity, which equals decreased employment at lower wages, which in turn equals decreased tax revenue.

The inverse is what is important to legislators involved in tax policy, and it goes like this: Decreased tax rates mean increased economic activity, which equals increased employment at higher wages, which in turn equal increased tax revenue.

This needs to be recognized as a natural law because it applies no matter what situation we are in, whether we are at war or peace.

It holds that government should not spend more than the revenues taken in when the economy is running at an optimum level, and expansion of spending should occur only as the economy expands. It also implies that government should borrow only during times of unmanageable emergencies such as wars and natural disasters. Even then, the government would be better off if it borrowed from other sectors of the government rather than from outside sources, such as communist China. Revenues used to pay interest are revenues not benefiting the citizens of a governmental jurisdiction.

This law also says that excessive taxation at one level of government can negatively affect the revenues at other government levels. For instance, if a state government overtaxes its citizens to deal with the unemployed from some plant shutdowns, then other businesses (usually small ones) may shut down, causing more unemployment and a greater demand on the state. That causes local governments and the federal government to receive fewer revenues and, often with entitlements, increased expenditures.

The economic crisis the country is presently in will persist as long as there is a fear in the private sector of fiscal irresponsibility in the government sector. It is time now to find candidates understanding of the hurt that taxation causes. In 2010, conservatives will retake Congress because of the financial pain caused to the citizens by the Congresses of the past three years.

TOM HOUGH

Natchitoches, La.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide