Friday, February 17, 2017

THE POWER TO TAX IS THE POWER TO DESTROY

"The power to tax is the power to destroy" is the classic American expression, it originated from an 1819 Supreme Court  decision. What does this mean? It means exactly what it says: the ability of a government to levy taxes gives that same government the ability to destroy an industry or an entire economy. When governments want to destroy an industry, but banning the industry would be unpopular with the voters, they can simply tax the industry to death. It has been done many times, for example, many states have harsh cigarette taxes that are so onerous many people have difficulty affording their habit. On the other hand, governments can do inadvertent damage by carelessly taxing industries. The perfect example of a bad tax came during George H. Bush's administration. He made the now infamous statement "Read my lips, no new taxes", but Congress didn't get the memo. They forced Bush to raise taxes on luxury items such as yachts. Soon enough, the yacht building industry in the US was utterly destroyed.

Today we have a war on food. Governments are picking and choosing what is appropriate for people to consume. Philadelphia is the first city in the nation to impose a "soda" tax, and business is already dropping. Why are governments making such decisions? It should be left to the individual to decide what he/she wishes to consume. People have been eating and drinking for thousands of years without any problems. But wait, here come concerned politicians looking at the the next election and all of a sudden they know whats good for everybody.

Today, they are targeting soda. Tomorrow the target for a destructive tax could be coffee, rice, bread, alcohol, meat, or vegetables. The politicians have a powerful tool, and they are all too eager to use it.
Politicians have declared war on soda

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