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Thursday, November 29, 2012

Punishing Productivity, Rewarding Unproductive

--posted by Tony Garcia on 11/29/2012
I have said that onerous tax rates punish and disincentize production.  I have said that the job killer in a society is corporate taxes and taxes on the wealthy. If you give people something for free they have no reason to earn that freebie.  Well, voting for the people that continue the handouts does not count as "earning" the handouts. As discussed in this article a mother on welfare is better off than a mother earning $60k.
[T]he single mom is better off earnings gross income of $29,000 with $57,327 in net income & benefits than to earn gross income of $69,000 with net income and benefits of $57,045.
That is over $27,000 in handouts! Include the tax breaks (the lower tax rate that is being paid is a break) and the benefit comes out to over double the lower salary's gross income in handouts! Someone has to pay for that. And no matter how you slice it up it is not a fair system. What is frightening is how heavy the load actually is.
For every 1.65 employed persons in the private sector, 1 person receives welfare assistance. For every 1.25 employed persons in the private sector, 1 person receives welfare assistance or works for the government.
That is ridiculously unfair to the productive members of society. Worse, it is penalizing the more productive person while rewarding and encouraging the less productive person. The effect of that penalty is that we reward the less productive and remove the power of the productive to be more productive. Think about this...if the $69k mother were not paying so much of the load of taxes then she could afford things like a housecleaning service to help around the house ($100/week) and the lawn care service ($50/week) and maybe even a few extra trips to the movies with the kids ($60/week for a family of 3). That is what extra productivity is being stolen from anyone is working and being successful in our society. Big government lovers continue to want to expand the group hooked on freebies meaning they want to decrease the size of the group that works and eventually the system will eat itself as the working group will be supporting others more than they can support themselves. And in that system why would anyone want to work when you can be better off bleeding the others who work?

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