Wednesday, May 12, 2004

Illinois is trying to raise money by raising sales taxes across a variety of markets, including farming supplies, custom software, and private sales of watercraft. Personally, I think that if Illinois needs more money to cover their bottom line, they should cut some services, using the U.S and Illinois Constitution as a guide to what services are required and what are fluff.

Look at it this way - in your home, you have an income from your job and expeditures for the things you need to live and survive. Once you take care of food, housing, and basic necessities, the rest of the money you have can go for the fluff items - digital cable, internet access, nicer cars, nicer clothes, jewelry, travel, etc. If you find that you are spending more than you are bringing in, you've got two choices - bring in more money to cover the expenses, or cut some of the expenses. In a normal family, increasing the income isn't feasible, so expenses get cut. In government, however, cutting expenses by dropping services is seen as political suicide, so income gets raised in the form of taxes.

At some point this has to hit an end. As any family knows, expenses don't usually go down on their own. The same goes for government. As more and more people demand government services (in the form of entitlements, more police, better roads, subsidized health care, etc.), the cost of government will go up, meaning taxes will go up, meaning people will have less money to handle their own expenses, which means they'll go to the government for more services to cover the ones they can't (public housing, welfare, jobs programs, etc.), which means government needs more money, which means more taxes and less money available to the individuals. Can you see the cycle?

What happens when taxation reaches 100% of your income? If government is now taking everything you make to provide services, and still not providing enough for you to meet your needs, where will the money come from? What will be your incentive to actually make more money, if you don't get to keep it? How will charities provide the services they render if no one has money to freely donate? How will business stay in business when no one has money to buy their goods and services? And when those businesses and charities fold, how will the government provide for those displaced workers? They're not making an income on which to pay taxes, so there's that much less to go around to everyone else.

Increased taxation does not help the economy. You would expect government elected officials - especially career politicians like Illinois' governor - to know and realize this. But they don't. So the beginning of the answer here is clear:

Stop electing morons.

Burr Wolff | Tax News

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