But it's not the federal government's money--it's yours and mine. The notion that tax breaks "cost the federal government" is perfectly absurd. From where do these taxes come? I don't care how much tax breaks "cost" the federal government. What is the U.S. federal government but perhaps the most inefficient allocater of resources in the world? It also betrays a lack of understanding of simple economics. The more expensive you make an activity, the less you're going to get of it. That's axiomatic--irrefutable. Don't try to contend with it; you might as well argue against the law of gravity. What am I saying? The more you raise taxes on a business, the less business you're going to get. If it costs manufacturer X $10 to make widgets and you raise the tax on each widget from $2 to $3, they'll either make less widgets, sell less widgets, employ less people--or likely a combination of all three. In any event, you will have a reduction in your tax base. You might very well get a net loss of federal tax revenue with the tax increase. What if the federal government decided tomorrow that something needed to be done about the "oncoming collapse" or something needed to be done to pay for the flood damages? What if Congress voted to raise the tax rate to 100%--will the federal government take in more or less revenue? Now, to be fair, let me put it the other way: what if the federal government decided to lower the tax rate to 0%? Would the federal government raise more or less revenue? The point is that there is some optimal point--but it's a moving target--at which the government will collect maximum revenues. It may be at any given point to raise taxes, it may be to lower them. We've had times where total tax revenues increased with a tax rate reduction. Why? I've already told you: cheaper widgets stimulate greater economic activity and there are more people collecting a pay check rather than a welfare check--they pay taxes, and the tax revenues can actually increase, or the company sells more widgets--and every widget is accompanied by a sales tax paid by the consumer or income tax paid by the manufacturer. This is not rocket science, a precocious 5 year old can grasp it fully. So whenever someone makes such an absurd statement as lower taxes "costing" the federal government, or how we must raise them or face a decrease in tax revenues and eventual economic collapse without regarding the fact that it is not a zero sum game or even mentioning the possibility, I know I'm either dealing with a person who: 1). Is so ignorant that they do not know as much as the average freshman economics major who barely skims through Macro and Micro (as I once was); or 2). I am dealing with a person who is simply demogoging the issue for strategic political gain. I can assure you that Mr. Walker is neither stupid nor ignorant of fundamental economics principles. But of course, he's quite aware that a great majority of Americans are. So that leaves but one conclusion, one category into which to fit him. I'll let the reader decide which.
Anyone who wants to see the long term economic stagnation and overall cultural backwardness that results from high taxation can come visit the state of WV anytime. Gas tax - 2nd highest in the nation, property tax - not high, but still there, state taxes - over 6%, plus "personal property tax" on cars, boats, luxuries, and then a nice "usage fee" when you register your car. Oh yes - insurance rates higher than neighboring states - primarily because the WV court system favors the "little guy" in lawsuits against the big bad insurance companies regardless of the merits of the case. Anti-business, high taxes, proud of their history - and completely unaware of the principles of economics and the progress that the rest of the nation has made in the last 20 years. If that sounds good to you, then come to WV and make it your home. You'll enjoy your shack, which is about all you'll be able to afford after the state shakes you down for a sizable percentage of your hard earned income. Oh yes, did I mention that WV residents must pay sales tax on FOOD? A basic commodity, generally exempted in all other states where sales tax exists. Not here - the poorest of the poor pay the same 6% tax on a loaf of bread as the (very few) upper income people do. Ever wonder what that tax on food does to a mountain living family of four making less than $20K per year (and glad to have even that)? Good thing there are a lot of churches - these people need to pray. Pray for relief from their ridiculous and utterly backwards tax and court system. And, on a more extreme note, pray for someone to buy the whole damn place and just start over, or maybe pray that the separation from the much more prosperous state of VA to the east had NEVER, EVER taken place..... Kind of reminds me of the separation of the Czech Republic and Slovakia a few years back - the Czechs got to keep the best part of the former nation of Czechoslovakia, while the proud Slovaks (who wanted their independence) are now one of the poorest nations on earth stuck with the non-industrialized portion that they so foolishly cherished to the expense of their economic well being. Combined they were much better off. Same goes for VA and WV.
New Mexico also has an absurd taxation system that is blamed (rightly, I think) for the phenomenen that we are the ONLY Southwestern state that has not experienced significant population or economic growth in the last few decades. On a personal income basis, we are more highly taxed than any of our neighbors, last time I checked. The open spaces and lack of crowding are nice if you have a job but we are ALSO one of the two or three poorest states in the Union and that gets old. Very, very old. Bad roads, lousy schools, children leaving for opportunities elsewhere...very, very old.
