Tuesday, November 27, 2007

Real world consequences of the leftist agenda

Tax law cannot be altered without real world consequences. Every time you alter taxes, you affect the activity you're taxing, even if the target (in this case big oil) seems to have unlimited money.

If you lower taxes, the activity increases, which explains why our government revenues in this country have set new records each of the past several years. The Bush tax cuts have fueled an uproariously good economy, and more business means more taxes collected, even at lower rates.

If you raise rates, the taxed activity decreases, sometimes drastically.

One thing is for sure; even if the people you're trying to tax actually have the money (and in this case they do, for now), you can rest assured they won't just hand it over without a fight.

This reminds me of the 1993 (or was it 1992?) congressional bright idea of a 10% tax on luxury yachts. 10% on top of the price of a million dollar yacht? SURE. Those rich guys can afford this. They won't even blink! Easy money.

Within a couple of years the builders of luxury yachts were going out of business for lack of sales, and hundreds (or thousands) of ordinary fiberglass workers and electricians and carpenters and painters were going home unemployed, adding to government (taxpayer) expense of unemployment payments.

Meanwhile the USED luxury yacht market, which had NOT been taxed this way, was flourishing, and yacht brokers were making as much money as ever while rich people were buying as many luxury yachts as ever; it was only the regular guy, the worker, who got hammered, and the government collected almost NO MONEY and had to pay out MORE money on unemployment.

Tax a behavior and you reduce it.

Even the big oil companies trying to produce oil in Alaska will walk away when the state government tries to hike their taxes arbitrarily-- because hey, they can afford it, they're big oil, they won't even blink, easy money, heh heh...

My guess is, the state government has already decided where to spend the money, and now they're going to be hard pressed to find it somewhere else.

What's next, a government diktat forcing companies to do business in your state? Will they declare the closing of a business to be tantamount to nonpayment of future taxes and use the law to force businesses to keep doing business?

Don't laugh-- I was in Brussels for several years, and a big British clothier named Marks and Spencer had a store there, and one (or several) in France. (I liked Marks and Spencer, because they sold pants that fit me.)

One day I read in the paper that they were closing their Belgian and French stores for lack of business, because they were losing money-- and the French government responded by passing a law FORBIDDING BUSINESSES TO CLOSE UP SHOP WITHOUT GOVERNMENT PERMISSION.

You can be sure that corporate slavery will be quickly followed by individual slavery.

Fortunately the French have had a mass vision of the error of their ways, and are in the painful process of correction from socialism.

I hope we don't go down that road and pass them going back the other way.

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