When I worked as a school teacher, I never saw, touched, felt or smelled funds that were supposedly taken from me for Social Security or income taxes. The same was true for the school janitor and the superintendent of Schools. Maybe each of us had the money for an imaginary instant in the mind of some bookkeeper, but where did the money come from? Maybe where the money came from is even more important than who paid it. Obviously it came from the taxpayers in our school district.
Everyone knows that sin taxes on alcohol and tobacco are intended to discourage their use. Exactly the same rationale should cause one to question our present income and social security taxes. Working and investing are both desirable. Yet our nation collects over ninety percent of its income from taxes on American labor and investment. Does this make sense?
Certainly workers and investors should both pay taxes, but should we tax them more when they do these desirable things more often and better? Republicans see this problem when they advocate cutting taxes on corporations and investment. Neither party seems to recognize what our present taxes do to American labor.
When a business hires a worker, it has to come up with enough money pay the worker and also for the worker to pay taxes on his wages. Every incentive exists to cut jobs, automate, use imports, and outsource labor.
Does it make any sense at all to tax American workers for working, American investors for investing and not tax imports?
NAFTA is Not the Main Problem
Early in our nations history, states were not allowed to place tariffs on goods produced in another state. This was done because it was believed that free trade would benefit the entire country.
Most states then wisely instituted sales taxes and derived income from all things purchased in their state. This way the state gained income from all businesses selling things on their turf. It is somewhat like, if a neighbors cows are going to graze (sell things) on our farm, we should share in in the profits.
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