Envy-based tax policy makes us all poorer

Robert Pratt

The debate about whether or not very high income earners need a tax cut is not the proper question that should be at the center of our national discussion.

That right question is: Which puts resources to better use to grow our economy, government or private individuals? Put another way, does money in the hands of government agencies and bureaucrats lead to more innovation and a growing economy to the same extent as money in the hands of private investors and businesses?

The reason we get sucked into the Marxists nomenclature of “middle-class” and similar when talking tax policy is twofold.

First it is because many forget the real question is what I posited above and the ignorance of such allows people to be captured by the second reason which is the anti-freedom, anti-capitalist, pro-big- and pro-all-powerful-government crowd purposely taking advantage of the base human sin of envy to manipulate emotion.

We will not get good-for-all tax policy if we talk about this group or that group not needing a tax cut, as we’ve heard from President Trump and liberal Republican and have always have heard from Democrats. We will only get good-for-all tax policy when such is designed to maximize the effective growth and efficiency of our economy.

It doesn’t matter whether it has any effect on their lifestyle, when the rich and wealthy pay less in taxes, no matter what they do with that retained money, those funds get invested in the private economy in one way or another funding innovation and growth.

Whenever that same money is taken by government it is absent from the private economy and instead feeds inefficient government bureaucracy which generally works against economic growth and results in less freedom and wealth for all, richer and poorer alike.

There is a cost much greater than the face value of the money when we take funds from the private economy and move such to the public-sector, even when for a common good we all agree upon.

It is not just that resources are generally far less efficiently used and less productive in government hands but, a big government take starves the innovative sectors of an economy of the resources needed to invent and grow. This is why so many fully developed high-taxation countries have moribund economies and low rates of innovation.

When you see it that way, the class-envy stuff dissipates for most rational people.