Thursday, October 6, 2011

Higher taxes = Public Dependency, Lower taxes = Personal Responsibility

Found this ditty on a blog (if you click this link you need to sign-up to read the submitted materials…so far, it’s a very un-invasive blog and I’ve found many insightful posts) today and with all of the petulance and whining on display across the United States at our financial hubs, I just had to share it.  If you’ve never run a business and only been an employee, you may not understand these words…I hope I am wrong about Sus Devp (small)that.  It also speaks for the need of a “flat tax”.

Yours in Truth,  Shelly


"I have never viewed taxation as a means of rewarding one class of taxpayers or punishing another.  If such a point of view ever controls our public policy, the traditions of freedom, justice and equality of opportunity, which are the distinguishing characteristics of our American civilization, will have disappeared and in their place we shall have class legislation with all its attendant evils.  The man who seeks to perpetuate prejudice and class hatred is doing America an ill service.  In attempting to promote or to defeat legislation by arraying one class of taxpayers against another, he shows a complete misconception of those principles of equality on which the country was founded.  Any man of energy and initiative can get what he wants out of life.  But when that initiative is crippled by legislation or by a tax system which denies him the right to receive a reasonable share of his earnings, then he will no longer exert himself and the country will be deprived of the energy on which its continued greatness depends."
"This condition has already begun to make itself felt as a result of the present unsound basis of taxation.  The existing tax system is an inheritance from the war.
  During that time the highest taxes ever levied by any country were borne uncomplainingly by the American people for the purpose of defraying the unusual and ever-increasing expenses incident to the successful conduct of a great war.  Normal tax rates were increased, and a system of surtaxes was evolved in order to make the man of large income pay more proportionately than the smaller taxpayer.  If he had twice as much income, he paid not twice, but three or four times as much tax.  For a short time the surtaxes yielded a large revenue.  But since the close of the war people have come to look upon them as a business expense and have treated them accordingly by avoiding payment as much as possible.  The history of taxation shows that taxes which are inherently excessive are not paid.  The high rates inevitably put pressure upon the taxpayer to withdraw his capital from productive business and invest it in tax-exempt securities or to find other lawful methods of avoiding the realization of taxable income.  The result is that the sources of taxation are drying up; wealth is failing to carry its share of the tax burden; and capital is being diverted into channels which yield neither revenue to the Government nor profit to the people."
"Taxation: the people's business", Andrew Mellon, 1924

There were some pretty smart people in America.  Andrew Mellon was treasury secretary for the decade of the roaring 20s, and then vilified and persecuted mercilessly by FDR.  Sometimes you can find in dusty history books more wisdom than anyone from the current government.


From the Wikipedia link on Andrew Mellon, I feel a need to cover Mellon’s well intentioned, but unheeded advice to President Hoover on how to reverser “the Great Depression”.  ~ Shelly

Mellon became unpopular with the onset of the Great Depression. He advised Herbert Hoover to "liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate… it will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people."[7] Additionally, he advocated weeding out "weak" banks as a harsh but necessary prerequisite to the recovery of the banking system. This "weeding out" was accomplished through refusing to lend cash to banks (taking loans and other investments as collateral), and by refusing to put more cash in circulation. He advocated spending cuts to keep the Federal budget balanced, and opposed fiscal stimulus measures. In 1929-31, he spent much of the time overseas, negotiating for repayment of European war debts from World War I.


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