[Vision2020] more proof that Thomas Sowell is a racist

[No Weatherman]

Taxing Times
The economy is not a zero-sum game where someone gains what others lose.
By Thomas Sowell

Chief Justice John Marshall said it all in one sentence: "The power to
tax is the power to destroy."

It is not the money that is taxed away that is destroyed. What is
destroyed is the wealth that does not get produced in the first place,
because high taxes make its production not worthwhile.

Those who are receptive to Senator Barack Obama's plan to increase
taxes on "the rich" seem not to understand that the issue is the
nation's loss of wealth. Today, wealth can leave the country when
heavy taxes threaten it — instantly, in an age of electronic financial
transfers — and create jobs and economic growth overseas, instead of
at home.

The two months between the time of a presidential election and the
time when the new president takes office is an eternity in terms of
how much money can be transferred out of the country electronically
before any new high-tax laws can be enacted.

Like so much that is said glibly by Barack Obama, raising taxes on
"the rich" has serious — and potentially disastrous — implications for
the whole country that have been ignored amid the political euphoria.

Moreover, like so much that is proposed under the magic mantra of
"change," it is something that has been tried before in many countries
and failed before in many countries.

Much wealth from Third World countries flows out to richer countries
like Switzerland or the United States, where it is safer from
confiscation. Jack up the capital-gains tax rate in the U.S. and more
Americans can be expected to send their capital elsewhere.

That means sending jobs elsewhere, so that even people with no capital
to invest lose employment opportunities.

Economists have trouble determining how many people are affected by a
tax increase because those affected extend far beyond those who write
the checks to pay the government.

Taxes on businesses can get passed along to consumers, in whole or in
part, even though it is only the business that writes the check to the
government.

Payroll taxes or government-mandated employee benefits may be paid for
directly by the employer, but these costs reduce the value of an
employee to the employer. If these costs add up to $10,000, for
example, employers bidding for labor may bid $10,000 less in salary
than they would have otherwise.

As in other cases, who writes the checks does not tell you who really
pays the costs, since the worker is now $10,000 worse off. The idea
that you can single out one segment of society to be taxed or
mandated, for the benefit of the rest of society, is reminiscent of a
San Francisco automobile dealer's sign: "We cheat the other guy and
pass the savings on to you."

The economy is not a zero-sum game where someone gains what others
lose. The whole economy can lose when ill-considered policies gain
political popularity and stifle economic growth.

People who do not own a single share of corporate stock can still lose
big time when capital gains taxes are raised — not only because jobs
can follow capital out of the country, but also because millions of
working people's pension plans own corporate stock, and those people's
retirement incomes will depend on the value of those stocks, which is
reduced by capital-gains taxes.

One of the biggest taxes is one that is not even called a tax:
inflation. When the government spends money that it creates, it is
transferring part of the value of your money to themselves. It is
quiet taxation but often heavy taxation, falling on everyone, no
matter how low their incomes might be.

By the end of the 20th century, a $100 bill could not buy as much as a
$20 bill would have bought in the middle of that century. For people
who saved cash, inflation amounted to an 80-percent tax. For others,
it was an 80-percent tax minus whatever cumulative interest or
dividends they received on the money they invested.

Given the staggering cost of the government's financial bailouts,
there is no way that Barack Obama's grandiose spending plans can be
carried out without inflation.

When politicians start talking about taxing "the rich," remember the
old saying: "Send not to know for whom the bell tolls. It tolls for
thee."
— Thomas Sowell is a senior fellow at the Hoover Institution.
(c) 2008 CREATORS SYNDICATE, INC.
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