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Wednesday, April 08, 2015

DENNIS PATRICK: POLITICAL MANIPULATION BY EXPLOITING ECONOMIC IGNORANCE

“If you have been voting for politicians who promise to give you goodies at someone else’s expense, then you have no right to complain when they take your money and give it to someone else including themselves.” – Thomas Sowell.

Everyone likes something for nothing. Who doesn’t enjoy the free lunch illusion?

Just because the price isn’t evident doesn’t mean the meal is free. Nothing is ever free -- no meal, no handout, no service. Somewhere, somehow, someone pays the bill. Touting “free” stuff is either deceitful or playing on the ignorance of the listener.

Tax-spending politicians find it easy to deceive the public subjecting them to economic quackery. The scam works. All that is required is that our political and bureaucratic overlords sustain the illusion embraced by the voting public that they are getting something for nothing. Absent fundamental economic literacy, voters will re-elect self-serving politicians who take voters as fools in the first place.

Nothing happens in government without money. Money is confiscated as taxes and redistributed as grants and budgeted programs. Taxes pay for every service and item the government provides. Farm subsidies, food stamps, bailouts, grants, government employees, fleets of vehicles for government employees and the fuel to run the fleets of vehicles for government employees -- everything flows from tax dollars. In essence, the federal government has become one huge money laundering machine. Bottom line: If we don’t pay taxes, we don’t get the “goodies.”

Some taxes are necessary; most are not. The lion’s share of tax dollars, 45%, go to major entitlements such as Social Security, Medicare, Medicaid and other health programs. This dwarfs tax dollars for defense, 19%. Tax dollars support “infrastructure,” the necessary physical provisions such as sewers, streets and sidewalks necessary for common use and the benefit of all. Tax dollars also support non-essential federal employees to the tune of $2 billion a year, $1 billion for overpayment of federal goods and services and $4.5 billion for improper food stamp payments to name a few.

Who really pays the taxes? According to IRS data, almost 60% of the tax burden is borne by the top 5% of income earners. Approaching from the bottom end of the scale, the lower 50% of income earners pay only 3% of the taxes. Underlying these numbers is the political and bureaucratic idea of “fairness,” a conglomeration of class envy and public ignorance.

Knowing they can get away with it, political overlords and bureaucrats treat the public like children. “You do as I say or you get no dessert.” Many examples exist, but space permits only one. Congress, in a rare effort to curb spending, held the line with the IRS. IRS Commissioner John Koskinen, in a presentation to the National Press Club on March 31, 2015, stated that his agency needs more than the $10.9 billion Congress budgeted or he will cut back on services and delay refunds. The IRS has ignored 60% of the phone calls from frantic taxpayers seeking help. On the other hand, he has no problem hiring another 9,000 agents to collect the Obamacare tax.

Greedy tax-and-spend politicians from both political parties always look for new money. They are not above singling out and demonizing pockets of constituents for exploitation. Because the approach is both dishonest and unfair, soak-the-rich schemes vilify producers and eventually backfire. Taxes remove money from the private sector where real wealth is created. Taxes result in less money to invest. New businesses are not started. Old businesses do not expand. New jobs (real jobs) are not created. Less disposable income is available for discretionary spending. Demand for goods and services falls off. Incentives for economic growth evaporate.

Another deceptive source of revenue occurred with tobacco. First, the windfall dollars from court settlements was spent on every budget item except what voters were told -- health care for smokers. Then, monstrous taxes were imposed by every state legislature looking for new money while ironically campaigning against smoking. Think about it. If anti-smoking campaigns are successful, revenue dries up, but newly created programs continue. Another play on ignorance.

If tobacco is a luxury, gasoline isn’t. Don’t blame the oil companies for the high cost of gasoline. Thank your greedy legislators for that. Reformulated gas mandated by the Clean Air Act of 1990 push prices up. Mandated use of ethanol may benefit certain farm states but it is twice as expensive as gasoline. It cannot be effectively piped and must therefore be shipped by barge, truck, or rail -- another added expense. And then there are the taxes. Federal and state taxes alone account for 1/3 the price of gasoline at the pump. All of these added costs for gasoline are imposed by legislators who count on the public’s ignorance of economics to impose their way.

People voting for the economic illusion of “free” things perpetrated by the political class are putty in the hands of their elected overlords. A blind electorate typically gets what it deserves.

 

Dennis M. Patrick can be contacted at P. O. Box 337, Stanley, ND 58784 or (JavaScript must be enabled to view this email address)

 

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