Friday, April 03, 2009

The More You Tax Something, the less You get of It

From the time I was 16 I was passionate about the future freedom of our country. Early on I came across a book entitled An American Renaissance, by then Congressman Jack Kemp. Kemp was an early architect of Reaganomics and an important soldier in the "Reagan Revolution."
One of the concepts conveyed in that book is that "the more you tax something, the less you get of it." Also, "the more you subsidize something, the more you get of it." Those simple words are at once a "no kidding" moment and, at the same time, really quite profound. That philosophy was being thoroughly violated in the world of Government in the 1970s under Jimmy Carter and it is all the more so the case in the world we live in today.

The New York Times Headlines states that "Jobless Rate Hits 8.5% as March Payrolls Fall by 663,000." This headline has followed months of business owners voting with their pink slips at the election results of last November. This is due to the fact that candidate Barack Obama made it perfectly clear that he intended to raise taxes on job creation.

Because of the Democrat's control of the Congress and the position of Obama, President Bush's tax cuts were not renewed. Those cuts had a direct effect on those who create jobs. Because of the failure to renew those cuts there was a marked increase in the Capital Gains tax, which will significantly undermine the economic activity that leads to more jobs. Than there is Obama's own proposal to dramatically increase the taxes of those who make $250,00 or more a year -- the very people who create most of the jobs. Add the many other taxes and regulations (which are very similar to a tax in their results) they are adding on the economy and we have a government waging a war on employment.

So Obamanomics are increasing unemployment by penalizing job creation, so what is it subsidizing? A great place to look is Obama's recent pork package also known as "stimulus" and the impact it would have on the various states, such as Mississippi. According to Fox News, Obama's measure would force states to allow people to receive welfare, even if they are not willing to work. For example, Barbour noted, that if the state of Mississippi wants to receive $54 million in increased unemployment benefits, they will have to expand the benefits to those not actively looking for employment or willing to take employment if offered. Barbour's decision not to take it led the state to receive less than $4 million of the expanded benefits.

In sum, Obama is taxing employment and subsidizing unemployment. The current headlines could be many things, but not surprising.

Kevin Price is Host of the Price of Business, the longest running show on CNN 650 (M-F at 11 am), AOL Radio, and CBS Radio. Eric Bolling of Fox News and Fox Business says that Price’s Blog “is very influential and moves the blogosphere.” Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com.

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Anonymous Dave_S said...

I consider Jack Kemp a political hero of mine. Not only is he a down-the-line free market capitalist, but he gets it when it comes to growing the party, reaching out to non-traditional GOP constituencies -- he was doing so before it was "cool".

I was living in Kansas during the 1996 election, and when Dole selected Kemp, I drove the 4 hours from KC to Russell because of Kemp. Getting to meet him, and offering to run his 2004 election for President was a personal highlight for me.

11:51 PM  
Blogger Kevin Price said...

Thank you for sharing those great memories. I was a regional coordinator for Students for Reagan in 1980 and the media was describing my "Pro-Reagan Rallies" as "Anti-Carter Demonstrations." The local GOP chair rebuked me and Jack Kemp was at the event giving a speech that night and interrupted him. He said "What this young man is doing is going to get this country back." There was absolute silence and I was treated like a king after that by the GOP. He gave me a special phone number to call if I had future problems and he couldn't go on about how proud he was of our efforts. This was big for an 18 year old getting his first serious taste in politics.

11:59 PM  

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