Consuming wealth

The critics of tax cuts use terms which cause me to believe that they have no understanding of taxes, earnings, wealth creation or much of anything about how our economic system works.

They talk about “windfalls” for “the rich,” and the government “giving” to the wealthy. Yet this is not the case at all. Consider the following simplified example.

You and I work for the same business, and we each receive the same amount of pay each week. To keep the numbers simple, say it is $1,000 per week. I, however, am bigger, and nastier than you, and force you to give me $100 every payday. You go home with $900, and I go home with $1,100, week after week.

Then one payday I decide to force you to give me only $50. I go home with $1,050, and you go home with $950. So, how much money did I “give” you? The answer, for an intelligent person is – none. All I did was extort less of your money.

The answer for way too many politicians is $50! Perhaps they think that the money really belongs to the government, and if they let you keep more of what is actually yours to begin with, then that is a “gift” from them to you.

Remember, government at any level – town, city, county, state or federal – can only “give” money to some citizens, that it has first confiscated from some other citizens. Governments, you see, again contrary to the beliefs of too many politicians, do not produce wealth, they consume it. They cannot create wealth, they can only redistribute it.