Reports have been circulating that the primary growth in new jobs (Not the calculated stimulus created or saved jobs number) is in the government sector. Just a little something for those of you to consider...
When the Government grows jobs in the public sector, the demands for taxes to pay for their salaries and benefits, including government paid for health care increases at an increasing rate. It is also an established fact that money spent on managing the government doesn't contribute to the overall GDP the way that manufacturing jobs and entrepreneurial risk takers have historically done.
The government will rely on increasingly larger sums of tax revenue to pay for the costs of the ambitious plans outlined by President Obama and his leftist Congress. History has shown us that when taxes or effective tax rates go up, job creation and maintenance goes down, due to the reduced rate of return on capital risk. Rich people will put their money, not in the markets in the US, but in other investments or hard assets as a hedge against loss or capture by governmental bureaucrats.
The President's plan to not raise taxes one red dime has already been broken in the health care bill. Estimates have some 90% of small businesses will see increases in payroll taxes in order to pay the costs of insuring those who do not have it. The 8% tax on employers who cannot provide insurance today will result in approximately 10% fewer jobs among businesses with 17 or fewer employees. The very real contraction in the job pool will increase long term unemployment and the financial burden on the families so affected, as well as the government which will assume the total cost of insurance for those families affected by the loss of income.
The accelerated rate of financial obligation by the government for food stamps, energy assistance and other basic needs will deplete state coffers, necessitating increased taxes on the decreasing number of those left with jobs. Capital flight will increase this rate of depletion as businesses who can afford to relocate their operations to lower tax entities will do so while still economically possible. If this capital flight takes them overseas, it is doubtful that the government will have the power to compel them to remain.
Am I happy with the status quo? Certainly not. Health care costs as well as the level of service in many parts of this country are woefully lacking. Former coworkers of mine here in Sidney, Nebraska have laid in a hospital bed overnight because the on-call doctor couldn't make it in, only to suffer catastrophic complications which completely left them unable to earn a living. Eye care providers can't get contact lenses in under three weeks and so people can't see the tax burdens that are coming down the highway at them like a runaway tanker truck.
The culture of bribery and paying one's constituency off for their vote is the crux of the problem. The founding fathers did not intend for government to be the solution, but rather the instrument of ensuring freedom to choose that which allows more freedom, not less. Taxes are a restriction of freedom and while necessary to a point, should be railed against for the purposes currently planned for. I suspect that the reason that more people are not opposed to the Obama Administration's plans is that they have the perception that they won't have to pay for it. Therein lies the problem and the Democrats have been masterful at perpetrating the symbol of class warfare for nearly a hundred years. The progressive tax on income and other assets has created a hatred for those who have risked capital for a chance at the American Dream by pitting those who can and have done well against those who are content with working a job, rather than have a career. This sense of entitlement by the lower economic classes creates the unbalanced desire to take from others even though they have risked nothing.
The Founders fought against such usury policies of the British government back then. It is time that we fought against such policies today as well.
Mike Rowland
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