COMMENTARY: Economic freedom and income taxes

By Jim Taylor, Special to the Star

We think the money the government takes from our income is ours and that they take it from us by force of law, but we are not treated that well: most of us are never even allowed to see the money they take. We are forced to estimate in advance what our income for the year will be and income taxes are removed from our income before we ever get it. So, it is actually distribution of our money, not redistribution.

In the debates on taxes, I never hear, “whose money is it, anyway?” Nobody seems to question the moral authority of politicians to distribute our money. In a free market economy, there is morality in the voluntary nature of transactions, and private property must be protected by government, not confiscated.

There can never be any tax break for the rich: assuming it’s their money to begin with. If we take less from them, we are not giving them anything. There is no paying for tax cuts; tax cuts are free.What we pay for is the wasting of our money on what government should not be doing in the first place. I’m told we have a law limiting taxes on highest earners to 20%, but if Trump should lose the 2020 election and we get Dems in control of Congress, it’s back to Hell again.

If we would be so fortunate as to keep a max 20% tax on businesses, the repatriation of foreign accounts to local investment that has been so great as to overcome any loss in government revenue within two years could carry the U.S.

economy to sustained 4% annual growth. History has proven the results of significant income tax rate reduction time after time. Competition with other nations for capital in a global economy required us to lower income tax rates.

We’ve also good news of Congressional success to eliminating the health insurance mandate. This is a positive move back toward freedom. An outright repeal of the Obamacare bill would be even better, and without any replacement. Still another positive bit of news was the vote of partial repeal of the Dodd-Frank limitations on financial institutions. The Press will never say the truth of all the good things coming out of the Trump administration. Of course, they are not in favor of these good things, and they hate Trump for his justified disrespect for them.

Seventy well-known think tanks downgraded the U.S.A. in its economic freedom rating from nine to number 11 out of 159 countries and territories worthy of a rating in 2015. There was a time when we got as high as number 2. Now the no. 1 and no. 2 spots are occupied by Hong Kong and Singapore. It will be interesting to see how 2017 and 2018 ratings come out. The ratings are largely based upon size of government, legal system and property rights, sound money, freedom to trade internationally, and regulation of commerce.What changes will Trump bring?

Jim N. Taylor is a Harlingen resident who has been published regularly in the VMS for many years.