Wednesday, August 13, 2014

“Winners and Losers”: A Welfare State Legacy

To expand on yesterday’s post on Monmouth University professor of economics and finance Steven Pressman’s article We must invert tax inversion, I want to highlight something else he said:

Another problem with tax inversion concerns winners and losers. The winners are people owning the stock of these companies. These are typically the wealthiest Americans. The losers are average citizens and small businesses, forced to pay higher taxes or see cuts in government programs that benefit them.

In my comments, I said, without elaboration, that most government spending is immoral. Here is a perfect example. Pressman notes that “loss of revenue” from tax inversions may force “cuts in government programs” that “benefit . . . average citizens and small businesses.” By immoral, it is precisely these government programs that I refer to, because they are based on forced redistribution of wealth from those who earned it to those who didn’t. Pressman claims these program beneficiaries would be “losers.” But how is getting fewer dollars that they didn’t earn or have a right to in the first place make them losers?

There are “winners and losers,” alright. There always are under welfare states. The “losers” are those whose earnings are taxed away, and the “winners” are those who collect the loot. Lower tax revenues leading to cuts in redistributionist programs would reduce, not create, winners and losers. That’s exactly what we need; a government that doesn’t create winners and losers; i.e., doesn’t economically favor some at the expense of others, which is crony socialism, sometimes mistakenly referred to as “crony capitalism”. We need a proper government, one that simply protects everyone’s right to keep and spend their own money as they judge best.

Related Reading:

Whose Money is it, Anyway?

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