The Free Market Punishes Failure And Rewards Success

By on October 20, 2021   /   Latest  

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By: Val W. Zimnicki

The free market punishes failure and rewards success. What can be fairer than that? Its counterpart, government bureaucracy, often does the reverse with its rules, regulations and mandates. The ups and downs in a true free market shake themselves off and allow any failures to try again. Free markets establish the value of goods and services. Conversely, bureaucratic central planners can only guess at product values. These uninformed administrators “who know what’s best for us” can only guess at product usefulness and will over-tax it.

A free market is the result of voluntary actions, not regulated directives. Ironically government mandates do not penalize those who make them and uninformed administrators are not held accountable for their bad decisions. Indeed, anti-business government resolutions often lead to promotions and bigger departments. Absurdly, government mistakes are rewarded with more government.

A free market is the result of voluntary actions by independent citizens. However, government approval of these goods and services is expensive and often takes a long time. Profit and loss are not important to government bureaucrats because there is plenty of money to print and even more to tax. Even unpalatable government services force the public to pay for them. This waste does not discourage federal and state agencies from their unnecessary protocols. This, of course, does not deter administrators from their unnecessary activity. After all, success, for them, is measured by the growth and size of the various government departments and their growing budgets. Waste grows government and is inherent in a bureaucracy.

High taxation is used to pay for this while simultaneously imprisoning economic and personal freedom.
The solution to growing government market intervention is to reduce taxes that support unnecessary government behemoths. Voting for fiscally responsible representatives is essential.

We should be allowed to buy whatever we want, to buy from whomever we want, and at market prices. Some think this is too much freedom and prefer to be told how we should lead our lives while being overtaxed doing it. They often work in government jobs.

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Bureaucracy Is Expensive

By on October 13, 2021   /   Latest  

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By: Val W. Zimnicki

Bureaucracy is the main poison in our republic.  It is self-perpetuating, freedom-robbing and very expensive. As George Washington put it; “Government….is force….it is a dangerous servant and a fearful master.” America’s forefathers therefore created a Constitution that does not give authority to deal with the many costly administrative services we have become accustomed to.  Some of these federal programs include the Department of Energy, Department of Commerce, Department of Transportation, Department of Education, and many more.

Let’s take the Department of Education as an example. This year’s budget is $7 billion. Of course, we did not have a education department until president Carter created one to appease the teachers unions. Have education problems been solved because of this unnecessary monstrous creation? No, and indeed many new artificial and costly difficulties have been created.

Simply put, students are dumber than ever. Of course, the good news for administrators is that thousands have unessential and redundant jobs. These government officials typically want their agendas to grow in scope. More employees mean bigger budgets, which means more importance. These bureaucrats are not subject to profit-and-loss accountability and they frequently prove it. After all, money can always be raised by taxing the good citizens of the U.S.  When a program fails, as most do, the cry of being underfunded is raised. Raising taxes to pay for failures is standard operating procedure. That’s the bureaucratic way.

Problems caused by expensive government cannot be solved by growing more government. Yet, federal and state governments continue to raise taxes to pay for their failures. The Department of Education is just one of thousands of costly misadventures that stifle economic growth and keep the static government employees occupied with ‘busy work.’

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TAX FOUNDATION OFFICER TESTIFIES AT JOINT ECONOMIC COMMITTEE HEARING ON BIDEN’S BUILD BACK BETTER AGENDA

By on October 10, 2021   /   Latest  

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Dr. William McBride, Tax Foundation Vice President of Federal Tax and Economic Policy, testified at the Joint Economic Committee hearing in Washington on October 6, 2021. His comments were entitled, “Building Back Better: Raising Revenue to Invest in Shared Prosperity.” He indicated there were three takeaways from the Foundations analysis of Pres. Biden’s plan: 

  • Corporate tax is not just paid by corporate shareholders: raising the corporate tax rate would reduce investment and productivity growth, ultimately leading to lower wages across the board.
  • Further increasing the progressivity of the tax code by raising individual income taxes for high-income earners comes with a cost: it will reduce incentives to work, save, and invest, broadly reducing employment opportunities throughout the economy.
  • The tax code is not an effective tool for social policy: optimal tax policy raises the amount of revenue needed while creating minimal economic costs, and other goals are better addressed through proper spending programs.

 After presenting the foundation’s analysis, McBride stated his conclusions: “The costs of the higher taxes should be weighed against the benefits, e.g., more tax revenue, improved public health, etc. Likewise, taxing income will reduce the generation of income. That means a smaller economy, less prosperity, and less opportunity. The economic costs can exceed the benefits in terms of tax revenue, and that is what we find with the House bill.” “The IRS can only do so much, and taxpayers are getting confused. The tax code is already excessively complex and the IRS is overwhelmed in its ability to administer and enforce the tax laws. There is a limit beyond which adding more complex provisions to the tax code no longer benefits taxpayers, the government, or the country as a whole. Rather than pushing the limit, we should seriously consider simplification.” Source: https://taxfoundation.org/build-back-better-revenue-joint-economic-committee-tax/

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