Equalize opportunities, not outcomes

Ronald Reagan once said, “The taxpayer – that’s someone who works for the federal government but doesn’t have to take the civil service examination.”  The government’s current efforts to equalize outcomes rather than opportunities is having a negative impact on our nation’s economy rather than stimulating it.  The majority of our tax money isn’t going to run the federal government, but is instead being given to other people (please read article below).  The current state of America’s economic policy is unsustainable long-term.  In order to promote future economic growth we should encourage business to invest, not discourage it to exist.  True economic growth will not take place until we stop blaming business in general for all our nation’s woes and instead begin to focus on how business, with appropriate regulation and oversight can add value to our society by creating jobs and opportunities.  In the words of Ronald Reagan, “The government’s view of the economy could be summed up in a few short phrases: If it moves, tax it.  If it keeps moving, regulate it.  And if it stops moving, subsidize it.”

NEW YORK POST


Where your taxes all go

By STEPHEN B. MEISTER

September 30, 2010

If you think the federal taxes you pay go to the run the fed eral government, think again. This year, every dime (and more) that the feds collect is going out in payments to other people.

That is, Washington is redistributing even more wealth than it takes in.

With every dollar the feds collect from the “Peters” going to the “Pauls,” and then some, nothing is left to pay the more than 2 million federal civilian employees, the armed forces or otherwise run the government.

The White House Office of Management and Budget calls the category “Payments for Individuals.” It includes more than 100 antipoverty programs such as welfare, food stamps and Medicaid — plus tens of billions each year for “tax credits” to people who pay no income tax.

But the bulk of it goes to folks who mostly aren’t below or near the poverty line — Social Security and Medicare being by far the largest, but also unemployment benefits, student assistance and day-care payments, to name a few.

The chart at right shows how Payments for Individuals, or PFIs, have skyrocketed more than 1,600 percent since 1945 — from 1 percent of GDP to 16.4 percent.

This year, the feds will spend $2.39 trillion in PFIs, amounting to nearly two-thirds of all federal outlays — now over 24 percent of GDP under the Obama-era spending explosion. And we’re running a huge deficit — tax collections, due to recession-reduced incomes, are now only 14.8 percent of GDP.

And, for the first time in history, PFIs — at 16.4 percent of GDP — exceed federal revenues. The difference — 1.6 percent of GDP — amounts to about $228 billion.

That is, the feds are spending $228 billion more than they collect per year in taxes — on just PFIs.

This setup has plenty of “Pauls” who are being paid — nearly half the “taxpayers” don’t even pay any taxes. But the burden is not spread evenly among the “Peters”: The top 1 percent of income-taxpayers fork over more than the bottom 95 percent.

But it’s not really good for the “Pauls.” The system is so unjust and incentive-robbing — not only to the middle class and the “rich,” but also to the poor — that, as the US Census Bureau recently reported, median family income has barely improved for a decade and poverty levels are now at a 15-year high.

And, despite all this redistribution of wealth, the wealthiest percent of Americans somehow manage to capture almost exactly the same share of overall wealth as they did in 1920.

So if robbing the “Peters” to pay the “Pauls” hasn’t helped the “Pauls,” what has all this redistribution accomplished?

Just four things — all bad:

* It’s lowered overall prosperity by robbing the entrepreneurial class of incentives, which has resulted in less business expansion and fewer jobs.

* It’s helped grow a vast nanny state by creating a convenient co-dependency between it and the poor.

* It’s kept the poor where they are, by eliminating the incentive for work, and stripped them of their dignity.

* It’s taken a terrible toll on the middle class — which, not being among the “Pauls,” is taxed to death to pay for it all, and has ended up with the same share of a smaller pie.

Taxes are for running the business of government, not for politicians to award as favors while talking about “fairness.”

It’s high time liberals give up pretending they’re evening the score, and focus on equalizing opportunities, not outcomes.

Stephen B. Meister is a partner of Meister, Seelig and Fein LLP.

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