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Haupt: How overtaxation can kill an economy

By   /   May 3, 2017  /   No Comments

“I hate big government, but I really hate a government that doesn’t work. So when they say we either have to raise taxes or cut core services, it’s actually a false choice.”

– Scott Walker

During the late 1970s and continuing for a decade, America experienced unprecedented prosperity.

President Ronald Reagan created wealth and jobs, and everyone prospered. Under his leadership, Americans changed the incentive structure on all taxes, inflation, and regulation. This enabled our economy to roar back to life after the anti-growth, high-inflation Carter years that devastated the US. But as usual, few political leaders profit from the sins of the past. And in the past eight years, America has moved away from protecting capitalism, which has decimated growth and prosperity. This is why blue color America rebelled and elected a president with a stellar record of free market success. He campaigned in blue and red states to give everyone the same opportunity to be prosperous like him.

“Government’s first duty is to protect the people, not run their lives.”

– Ronald Reagan

The policies of Barack Obama, Hillary Clinton, Harry Reid and Nancy Pelosi caused America to lose its status as the world’s growth and job-creation machine. Their economic mismanagement of our nation was an unmitigated disaster. Economists warned them if they did not curtail expanding government, we’d go belly up.

This gang of four’s policies not only failed to articulate a recovery; they set us back to the nightmare created by Franklin D. Roosevelt. The activist Federal Reserve and Obama’s fiscal stimulus policies ravaged social and economic progress. Their systemic solution to try and revive a failing economy was to raise taxes and redistribute wealth. This was only a straw man to cover up their plans to facilitate their brand of progressive social engineering.

“Those who believe that what our people desire is big government are living in a state of delusion.”

– Marco Rubio

Before our wise founders set forth to create a free market nation of free men, they were congruent in philosophy on one key principle: History demonstrated that the larger a government is, the more expensive it is to run. Since they wanted to give us a republic, they looked to Rome as an example of what “not to do.”

The cataclysm of the Roman Empire was a result of the greatest tax burden in history for the average citizen. The 3rd century taxation was so desolating that many citizens were driven to starvation and bankruptcy. Rome was so desperate for money they chased after widows and children to collect taxes owed by their deceased. By the 4th century, the Roman economy was dolorous. Many farmers vacated their land and moved into the cities to receive public amenities. By then, Rome was spending most of its taxes on military and public entitlements and people wanted more.

“What people want is big government that they don’t have to pay for.”

– Timothy Noah

Greece mimicked the Romans in 2008 as their economy wilted quicker than a lily in summer. Most of Europe entered the global recession, but Greece bottomed out. Unemployment reached 28 percent in 2013, which was worse than the U.S. during the Great Depression. Government spending was 50 percent of Greece’s economic output by 2013. Greece’s score from The Economic Freedom of the World Index was the lowest in all of Europe’s free nations.

During the heart of this tumultuous fiscal crisis, Greece soon tried to atone for this profligacy by implementing a fiscal “austerity” program to reduce government’s size and cut back onerous levels of entitlements. But the people revolted and Greek leaders cried uncle!

“Big government doesn’t help the middle class, it buries it.”

– Rubio

Like so many countries before, Greece suffered a crisis caused by too much government and the politicians decided the solution was to “drum roll” its size and scope. It is a sobering reality. The tax burden was so oppressive people didn’t want to inherit property. Throughout the land people were lining up renouncing their inheritance. They’d rather give it away than pay the taxes.

When this tax revenue dwindled to a trickle, Greek politicians squeezed even more from the taxpayers. They had drones on social media to see if people had lifestyles more extravagant than income they reported to tax police. Greek officials foolishly thought the more they raised taxes and printed money to pay their bills, the sooner the economy would improve.

“To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical.”

– Thomas Jefferson

The economic decline of any civilization is caused by political elites who give away the farm and milk the cows dry every time someone demands something. By permitting voters to dictate social policy, they must increase public debt and debase the currency. This results in obloquious taxation and insidious restrictive laws. The people sell their liberty like Judas sold his soul for “30 pieces of silver.”

To support the waterloo of giving government unrestricted power, they put the propaganda machine into high gear to ensure everyone that this is for their good. Deluded by patriotic fervor, voters are too simple-minded to notice they’re being plundered by the state. Whether it’s direct or indirect taxation by printing money like Obama and Carter did, the result is the same. Tactics to support wealth redistribution have been used for centuries to market political agendas at the expense of all taxpayers.

“Unrestricted government power always leads to lost liberty and freedom.”

– Nick Davis

The economic blunders in Greece and Rome will be replicated worldwide for centuries. People cannot comprehend that government does not have any money except what they steal from them. And “He who giveith takeit away”! We have felt the sting of these past failures already.

There are many blue states on a bad trajectory, such as California and Illinois. If there’s any hope for the politicians in Sacramento and Springfield to right the ship, they best do it now. If they beg the feds for money. D.C. must tell them no! This is your faux pas for bankrupting your state houses. Ludicrous, unfunded pensions and obscene benefits for blue state employees are a ticking time bomb. D.C. must school them. There are no more gifts of bailouts from ol’ Uncle Sam.

“A liberal is someone who feels a great debt to his fellow man, which debt he proposes to pay off with your money.”

– G. Gordon Liddy

Plato saw the writing on the wall in 400 BC: “Democracy is a charming form of government, full of variety and disorder.” Politicians will continue to misappropriate funds when taxpayers foot the bill. Perhaps in 1,000 years, historians will be writing the same thing about us. It’s not far-fetched if we don’t remember our history.

Rome was not built in a day and it did not fall in one. It was a transition from the frugal governing by Julius Caesar to when Odoacer deposed the Emperor Romulus into exile. They were unable to defend themselves and were easily conquered.

“The Roman Empire was much like us. They lost their moral core, their sense of values of who they were.”

– Ben Carson

We must transform our tax policy into an engine of growth and innovation and apply “tough love” to cut back on social engineering and entitlements before we meet the fate of Rome and Greece. We have no more money to buy votes.

Government’s “We have what it takes to take what you have” attitude, “grab our money and run with it,” must be changed. We must maintain capitalism and free markets in order to field our strength as a world leader, to protect our liberty and freedom. Anyone can increase taxes and balance the budget, but it takes guts to tell people the free ride is over.

D.C. must learn how to say “no!” If we fail to do this now, big government will be our Waterloo. Lyndon B. Johnson once said, “In 1790, the nation which had fought a revolution against taxation without representation discovered that some of its citizens weren’t much happier about taxation with representation.”

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William Haupt III is a retired professional journalist, citizen legislator in California for 40 plus years, and author. He got his start working to approve prop 13.