In a free market economy, individual people get to choose winners and losers. We do this by purchasing goods and services at specific privately owned businesses that provide us a good product at a good price. Businesses that do not provide that aren't patronized, and eventually go out of business. Businesses that cater to their customers grow.
It is this free interaction between individual citizens that makes the system work -- through millions of individual interactions every day.
No private business can force individuals to purchase their product or service, nor can the business force anyone to work there. Their product must be something both affordable and desired. Likewise, employment at a private business is an individual contract between the employee and a representative of the business owner to perform specific tasks for a set fee.
The individual wanting the job must decide how much the portion of his/her life he is giving to the employer is worth, while the employer must decide what that person's experience, skills, and effort is worth to the business. If one or the other decides it is not worth it, they go their separate ways.
The individual holds all the cards under the free market.
Government businesses and services are different. Doing business with the government means you have no choices. They can force you to pay for a product or service regardless of whether or not you use it. It is able to seize a portion of your life in payment for services you don't even receive.
We are not forced to send our children to local schools. We are allowed to personally pay for our children's education at private schools or to teach our children ourselves.
However, home owners are forced to pay for the education of the masses, regardless of whether or not they use that government service.
Government holds a near monopoly on primary education in San Angelo. They don't have to turn a profit. They can charge whatever they believe they can get away with, as they can force people to pay for an inferior service. They can lavish employees with benefits not found in private businesses, such as free health care and defined benefit pensions. Their budgets never take into account economic fluctuations that private business has to consider.
When government competes directly with private business, private businesses generally lose. The government doesn't have to turn a profit. When government holds a monopoly on a product or service, they have all the power.
The worst part is that every dollar seized by government is a dollar that cannot be spent by the individual in the local economy. It is largely a "zero sum" game.
When the local government (or government school district) raises taxes, that money can no longer be spent in the local economy. Writ large, the federal $800 Billion "Stimulus Package" failed precisely because most of the money went to state and local governments. That provides very little impact on the economy, which depends on individuals, not government, having the money.
The government's role in the economy is the same as it should be in other aspects of one's life: to protect the individual from those who would infringe on their rights by force or fraud.
Nothing more. Nothing less.
A blog for the Libertarians in the Concho Valley.
Showing posts with label Taxes. Show all posts
Showing posts with label Taxes. Show all posts
Tuesday, June 21, 2011
Tuesday, April 20, 2010
How Much is a Man Worth?
Here it is, Tuesday again. I had previously prepared a nice little primer on the Libertarian Party for this week’s post. However, having parted with over $5,500 of my hard earned dollars last week, I thought that maybe I’d tackle another issue instead.
When I added it up this year, with Federal Income Tax, Social Security, Medicare, and local property taxes (not including sales tax), I was taxed at an effective rate of 32%. So, at 11:12 AM on Thursday, I stop being paid for the rest of the week. Or, to look at it realistically, I don’t start getting paid until about 1:00 PM on Tuesdays. Mondays really suck.
A man’s work is his life. I don’t mean that figuratively. It is an exchange of a portion of his life for something of value to him. In colonial times, a man bartered and exchanged the product of his labor for other necessities. Soon coins were used for the same purpose, in addition to the bartering system.
Later, coined money became the main means of purchase. A man exchanges his labor for a piece of gold or silver, and exchanges that piece of gold or silver for the things he needs. It was basically the same arrangement as before, but it made life a little simpler. Instead of taking a cow to the market and exchanging it for 20 bushels of corn that had to be stored, you could just sell the cow, and buy the corn as you needed it. Local, private banks were the norm. The U.S. went on the gold standard in 1873. The Federal Government’s role was to make the exchanges “regular” and fair.
Then, in 1913 things changed. The Federal government amended the constitution to tax your labor. They also established the Federal Reserve System to standardize paper money. In 1914, the Federal Reserve note was the standard of payment, and was backed by gold. But no longer was the exchange between just people. Now the Federal government was involved. It was only 1% for most people; only the rich had to pay 6%. In one fail swoop, the federal government reduced a man’s life by 1%-6% annually. It had taken the political class 122 years to undo the Constitution, and forever change the balance of power from the producers to the moochers. And our great-great-grandparents let them do it.
Once they had their foot in the door, it was only a matter of time. Who could complain about 1%, right? Then it became 2%, and then higher. They taxed everything. They taxed your income, the products you bought, and the services you used. They taxed your property and your investments. And our great-grandparents let them do it.
Next, in 1933, they took the paper money off of the gold standard, and in 1964 they were taken off any precious metal standard. The paper money was now only as good as the “full faith and credit of the U.S. government.” The paycheck soon became the standard method of payment. But the government had already gotten their cut before the worker. It was only fair, since it’s the government’s money, right? And our grandparents let them do it.
Now, most don’t even get the paper. It has been reduced to numbers on a computer. And the Federal government takes its cut before you even know you earned it. They tell us that the people who make more money don’t really earn it, they’re given the money. They are just more fortunate than the rest. And too many of us have bought that crap.
But, in essence, work is still the same. It is still an exchange of labor for goods. It's just that now, a man's life is worth less, and the Federal government gets a cut of your labor – and your life - first. They decide how much of our own money we get to keep. The rest, they spend and give away as they see fit. And we are supposed to be thankful to them. Trust me, our children will care when it’s their turn. And they will hate us for it.
At least, that’s the way I see it.
When I added it up this year, with Federal Income Tax, Social Security, Medicare, and local property taxes (not including sales tax), I was taxed at an effective rate of 32%. So, at 11:12 AM on Thursday, I stop being paid for the rest of the week. Or, to look at it realistically, I don’t start getting paid until about 1:00 PM on Tuesdays. Mondays really suck.
A man’s work is his life. I don’t mean that figuratively. It is an exchange of a portion of his life for something of value to him. In colonial times, a man bartered and exchanged the product of his labor for other necessities. Soon coins were used for the same purpose, in addition to the bartering system.
Later, coined money became the main means of purchase. A man exchanges his labor for a piece of gold or silver, and exchanges that piece of gold or silver for the things he needs. It was basically the same arrangement as before, but it made life a little simpler. Instead of taking a cow to the market and exchanging it for 20 bushels of corn that had to be stored, you could just sell the cow, and buy the corn as you needed it. Local, private banks were the norm. The U.S. went on the gold standard in 1873. The Federal Government’s role was to make the exchanges “regular” and fair.
Then, in 1913 things changed. The Federal government amended the constitution to tax your labor. They also established the Federal Reserve System to standardize paper money. In 1914, the Federal Reserve note was the standard of payment, and was backed by gold. But no longer was the exchange between just people. Now the Federal government was involved. It was only 1% for most people; only the rich had to pay 6%. In one fail swoop, the federal government reduced a man’s life by 1%-6% annually. It had taken the political class 122 years to undo the Constitution, and forever change the balance of power from the producers to the moochers. And our great-great-grandparents let them do it.
Once they had their foot in the door, it was only a matter of time. Who could complain about 1%, right? Then it became 2%, and then higher. They taxed everything. They taxed your income, the products you bought, and the services you used. They taxed your property and your investments. And our great-grandparents let them do it.
Next, in 1933, they took the paper money off of the gold standard, and in 1964 they were taken off any precious metal standard. The paper money was now only as good as the “full faith and credit of the U.S. government.” The paycheck soon became the standard method of payment. But the government had already gotten their cut before the worker. It was only fair, since it’s the government’s money, right? And our grandparents let them do it.
Now, most don’t even get the paper. It has been reduced to numbers on a computer. And the Federal government takes its cut before you even know you earned it. They tell us that the people who make more money don’t really earn it, they’re given the money. They are just more fortunate than the rest. And too many of us have bought that crap.
But, in essence, work is still the same. It is still an exchange of labor for goods. It's just that now, a man's life is worth less, and the Federal government gets a cut of your labor – and your life - first. They decide how much of our own money we get to keep. The rest, they spend and give away as they see fit. And we are supposed to be thankful to them. Trust me, our children will care when it’s their turn. And they will hate us for it.
At least, that’s the way I see it.
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