Thursday 24 January 2019

The Give and Take Problem

"The government cannot give to anybody anything that the government does not first take from somebody else."
-- Adrian Rogers

I rarely quote ministers, but I sat and reflected upon this recent commentary for a 75-percent tax situation for the ultra rich by Representative Alexandria Ocasio-Cortez (D-N.Y.) (AOC).  I eventually came to this quote which really lays out a frustrating part of the taxation gimmick. 

It used to be that the government simply provided simply freedoms (at least in the 1776 mentality).  Then the government came to provide protection against invasion....requiring a standing Army.  Then the government reached a stage where taxation was necessary because of the various services being provided (roads, bridges, education, etc).  Then the government took on social 'corrections' and got into housing and healthcare for the elderly.  Then the government got into university loan situations where vast sums of money were given for sometimes worthless degrees.  So now the government (by AOC's insight) would go and become the fair distributor of wealth.

Someone from the government (if the AOC proposition continues on and becomes reality) will sit and make a determination about who is reasonably wealthy and overly wealthy.  A guy making $100,000 a year?  He's probably safe.  A guy making $500,000 a year?  He's probably in the threshold of being in the 75-percent taxation racket.  A guy making $1-million a year or more.....he'll be in the 75-percent tax racket for sure.

At some point, if all this redistribution and taxation business fell into place (assuming in the next decade).....you would see a dramatic drop in business growth, and probably view the unemployment rate climbing to around 10-percent nationally.....as businessmen got smart and just downsized. Why bother taking risks or making money?   It would take around a year for everyone to wake up and realize that instead of resolving/fixing things....this gimmick of 'give and take' delivered some incredible negativity to the economy. 

At that point, the voters would turn to President AOC....asking for an explanation.  And she'd have to admit she really didn't know much about economics or business. 

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