"Mistrust those in whom the urge to punish is strong." Friedrich Nietzche

"Any and all non-violent, non-coercive, non-larcenous, consensual adult behavior that does not physically harm other people or their property or directly and immediately endangers same, that does not disturb the peace or create a public nuisance, and that is done in private, especially on private property, is the inalienable right of all adults. In a truly free and liberty-loving society, ruled by a secular government, no laws should be passed to prohibit such behavior. Any laws now existing that are contrary to the above definition of inalienable rights are violations of the rights of adults and should be made null and void." D. M. Mitchell (from The Myth of Inalienable Rights, at: http://dowehaverights.blogspot.com/)

Monday, June 22, 2009

Producing Workers and the Tax Pool

In my political pamphlet, "The Myth of Inalienable Rights" (http://dowehaverights.blogspot.com/) I coined a term for those people who support themselves, as well as everyone else. I call them "producing workers."

A producing worker is someone who is integral in the production of tangible goods, which is what true wealth is. You can't eat money and you can't build a house out of money nor can you wear it as clothing. Money is merely a way of keeping track of your wealth. Even if you are not fabulously wealthy, you still have wealth if you have possessions.

So who is a producing worker? A producing worker is a person with the idea for making something that other people want to possess. Or it is a person with the capital to get that idea made into a tangible object. Or it is a person who provides the labor to make the object. Or one person could fill all three positions. One person could have an idea, have the capital to buy the necessary materials, and provide the labor to make it.

The taxes that the producing workers pay support everyone else, with one minor exception. Service providing businesses such as restaurants, hotels, and airlines get paid directly by producing workers, or indirectly by people who have shared in the taxes that the producing workers have paid. Then, the service providers pay taxes on the money that came directly or indirectly from the producing workers.

Let me try and create a mental image. Imagine a large pool of water with the water representing the collected taxes from all taxable income. There is a very large inlet pipe which is coming from the producing workers. Off to one side of the large inlet pipe and before the tax pool outfall is a smaller pipe leading to the service workers and then from them an even smaller inlet pipe pouring into the tax pool.

On the other end of the pool are three siphons: federal, state, and local governments. Any money that is disbursed by these governments, whether for paying wages to government workers, farm subsidies, corporate subsidies, personal subsidies (welfare), social security, medicare, the military, road construction--anything paid for from and by these governments--comes from the taxes paid by the producing workers.

Of course, anyone getting an income from the government has to pay taxes, so there is another inlet pipe collecting that "tax water" and putting it back into the tax pool from the government side of the tax pool. However, that does not raise the level of the tax pool. It is only a small percentage of the water that was taken out previously by the governments. (And, one wonders, why government workers don't have a tax adjusted income so they don't have to pay taxes, thereby reducing the cost incurred by them filing their taxes and having their tax claims processed by more government workers.)

Also, when anyone receiving an income from the government eats in a restaurant, stays in a hotel, flies on an airplane, they are paying the service workers with the money paid in taxes by the producing workers.

When a producing worker buys anything, whether it is an automobile or a pencil, he or she is paying for it with the wealth--translated into dollars--that he or she has made by producing things that people want. When anyone receiving an income from the government buys anything, they are paying for it from the wealth created by the producing worker.

If producing workers are taxed too much it destroys incentive and, perhaps, makes some of them want to try and get in on the "free" government money. Heavy taxes also makes many of the financiers of production look for cheap labor overseas.

And, as to government largess (with other people's money), the more people receiving government money, for whatever reason, the fewer producing workers there will be to keep the tax pool at a sustainable level. If the tax pool level gets too low, the national economy will fail.

We should never forget that the whole of our economy is supported completely by the producing worker. Also, there is no such thing as a free lunch (TINSTAAFL to those who understand), regardless of what the progressives and socialists would have you believe. Fewer people on the government payroll or dole would mean more money in the pockets of those who actually support us all. That would mean more spending by those people, which would create more demand for goods, which would create more jobs and more producing workers . . . and a healthier economy.

No comments: