A tax increase for Concord?
The Concord Monitor editorialized today in favor of taxing more money out of the pockets of Concord residents during what virtually everyone is now calling the “worst recession since the Great Depression.” The Monitor believes it’s a good idea to raise taxes to save two police officer jobs, keep the library open longer hours and keep snow plowing at last winter’s level. The paper wants a tax hike that would raise $500,000 to accomplish those goals.
That might sound great to a lot of people. The paper says that raising that money to fund those services would be “worth doing to keep Concord the kind of city employers want to come to.” But who is going to pay those higher taxes? Employers. And their employees.
That $500,000 won’t just appear magically if the city raises tax rates. It will be removed from the local economy. Families and business owners who might use that money to buy more from local merchants or keep their employees on the job won’t have it and will have to make their own spending cuts. That’s what advocates of tax hikes never seem to get. Every dollar in “new revenue” for government is a dollar in lost revenue for a family or business.
Most people get that a recession hurts because people have less money to spend. That’s why the stimulus bill sailed through Congress. The idea was to put money in the hands of the people, who would then spend it. If recessions are bad because they reduce the amount of money people have to spend, then why are tax hikes — which reduce the amount of money people have to spend — good?
They aren’t good. But somehow lots of people believe that if government, rather than, individuals, spends money, the results will be more positive for everyone. That just isn’t so, as history keeps showing. It’s not the case that government will spend more on top of what individuals spend. For the government to spend more, individuals have to spend less. So we’re not getting more economic activity, we’re really getting less because filtering money through government before pumping it back into the economy results in waste and inefficiency and leads to less money being spent and invested.
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