Here is how you can become an expert on taxes. Go to the State Fair and watch the horse-pull competition. Or go to the County Fair and watch the tractor-pull.
As they pile more and more weight onto the sled, the horse (or tractor) pulls the load a shorter and shorter distance. That is all you have to know to understand the effect of taxes on our economy.
Now, imagine if the officials camouflage some of the weight. Dress up a 200 lb. weight to look like a pillow. This might fool the spectators. But do you suppose it will fool the horse?
Imagine if the officials claim the added weight will only affect the bigger horses and not the small ones. Or say that if they place the weight on only one corner of the sled the horse won’t notice it. Right.
You might bring this analogy to mind when you read and hear about new taxes the politicians are crafting for your economy.
They will camouflage the taxes. Hoping you won’t notice that what they are camouflaging is really a tax.
This is what they are doing with this cap and trade legislation. None of them call it a new tax. Instead, they call it a mechanism for reducing carbon in our atmosphere. The very term “cap and trade” sounds more like a flea market term than a tax.
The politicians will not call this a tax. They will not admit it is one of the largest taxes ever conceived. They will not admit it is simply a tax on energy. Nope. It’s cap and trade and it will be good for our environment.
It is a tax. An almighty huge tax. The emperor has no clothes.
The politicians will camouflage taxes by telling you their measures are only designed to help you. The outrageous tax on tobacco? Its only purpose is to encourage smokers to quit. And to punish big tobacco companies. Taxes on blimpo-burgers and transfats? These will be good for everybody.
The truth is that these are easy ways to pluck a goose to fill government coffers.
The new taxes that are suggested for healthcare reform? Why they are only being considered to improve the system for tens of millions of folks.
Sorry. They are massive taxes. And whether they will help the system is questionable.
Politicians routinely target higher earners (or tobacco smokers). This lets those not targeted think they have escaped the tax. Useful, to the politicians. But usually not true.
No matter who they target. No matter how they dress it up. New taxes burden the economy. Period. And everyone who lives and works in the economy is affected. If you think not, you delude yourself.
Overtax the investor, the entrepreneur, and you slow his activity. Slow his activity and you will see fewer new jobs. You will see less new technology. For he is the one who funds both.
Sneak in an energy tax and you gum up the entire machine. Bring in a VAT tax or national sales tax and you pick everybody’s pocket. When everybody’s pocket gets picked the economy takes a hit. For instance, the smoker might spend another thousand dollars on products or services that employ folks. Instead, he sends it to the government in tax.
For decades Europeans have scratched their heads over why their economies have failed to create new jobs. They have debated why their economies have not had the energy that America’s has displayed. They have wondered why their unemployment numbers have been so high for so long.
The answer is one they cannot bear to face. Taxes. They have too many. Dressed up as things that only benefit their societies, they are still taxes. The pantyhose on the pig does not change the pig.
We are spending trillions more than we have. To pay for the crazy spending, the pols will find ways to tax us big time without admitting it. They won’t fool the horse that is our economy.
From Tom ... as in Morgan.
For more columns and for Tom’s radio shows (and to write to Tom): tomasinmorgan.com.