They say ” High taxes don’t cause economic problems”
Most people accept the idea that taxes are a necessary part of life. We’re taught from an early age that money taxed away from us is what funds a large number of important government programs that help our society.
Here’s a question worth considering: Instead of making our lives better, do taxes actually cause economic problems? Most people, especially politicians, don’t believe such problems might even exist.
The truth is, a great deal of what the government does with our tax money is not in keeping with its focus of protecting our natural rights and promoting justice. It’s used, instead, for what are called entitlement programs like Social Security, Medicaid, etc… along with providing food stamps, education grants, farm subsidies, and funding our nation’s hundreds of military bases overseas, and a gigantic army of government workers.
The people who work for the government are often referred to as the public sector, meaning they are paid with funds taken from the public in the form of taxes.
The private sector on the other hand refers to the business owners and workers who produce the kinds of goods and services that raise our standard of living. The private sector has to create value in order for people to choose to spend their dollars with those businesses or individuals.
When the government takes a certain percentage of their money in the form of taxes, taxpayers are left with less money to spend according to their needs and wishes. If they are taxed out of 40 percent of their money, that means they only have the use of 60 percent of their income.
They must send the rest to the government rather than spending it on things they need or want , or simply saving for future needs. This means less economic activity in the private sector that would be meeting their needs by providing the things they really wanted to spend their money on.
There’s also the problem of people who are employed in the public sector being dependent on those taxpayer dollars. They may be good people indeed, but the government does not create wealth like the private sector does. It can only take the wealth generated by the private sector and transfer it to its workers or its programs.
If those same government workers were employed in the private sector, they’d have the same incentives that drive other workers in the free market to provide real value for those who choose to be their customers.
People who were allowed to keep the money they’ve earned, rather than having to give up a large portion of it as taxes, would still be free to help the needy. This is how communities helped the poor and downtrodden before government created programs funded by the taxpayers.
The economic problems caused by taxes aren’t always easy to recognize. But they are real and cannot be excused just because a particular program is based on good intentions.
Original article: https://investingand.money/2023/02/high-taxes-dont-cause-economic-problems/
