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Tuesday, July 19, 2011

Debt and taxes

I don't have the answers for all that's going on (or not) with the Congress and the President right now. But I think I know some Biblical principles.

1) Pay your debts. And, not only should they be paid, but paid when the creditor is expecting to receive them. The Golden Rule relates to that. So does a specific command in the Bible. (Leviticus 19:13b The wages of a hired servant shall not remain with you all night until the morning.) It is possible that failing to raise the debt ceiling will not result in economic disaster, although most economists say that it would. I don't know. But failing to raise the debt ceiling, which, unfortunately (see principle 2) is necessary in order to pay our obligations, would be a moral disaster.

2) Don't take on debts that you shouldn't. I don't have a specific verse in mind for this, but I think it's a sound principle, supported by scripture.

If we hadn't had trouble with principle 2, we wouldn't be worrying about principle 1, and, it seems to me, we need to do something about cutting down on our spending now. We should have done it before, but now is the best time we have. Let's do it. The deficit also needs to be addressed. We are spending too much. Let's do something about it, for now and for the future.

3) Don't deceive others. Speaker Boehner, and others, have said "taxes kill jobs." Perhaps that was just a sound bite, and taken out of context, but, as it stands, that's deceit, and surely the Speaker knows it. (He's not the only deceiver in politics, of course.) There are two obvious extremes on taxes. All income, of business or individuals, could be taken. Or none of it could be. In the first instance, there would be little incentive to work, or to develop business which might hire others. In that sense, the Speaker is right. But the second instance also would have terrible consequences. What legitimate business would want to establish in a location where there is no police or fire protection, no system of justice, no military protection, where infrastructure is not repaired or developed, where there are no schools or hospitals? What family would want to locate there, in the 21st Century? Taxes pay for these things, and, thus, some taxes are necessary. And, taxes do create some jobs, like, say, firemen or soldiers, or, for that matter, the job of Speaker of the House! Having these things, paid for by taxes, means that jobs may be created by the private sector, too. Too many taxes can kill jobs. So can not enough taxes.

Calling some things taxes is also deceptive. How a reasonable person can say that taking away subsidies for the production of ethanol from corn is a tax escapes me. The same thing goes for taking away special accounting treatment for hedge fund managers, or taking away tax breaks for oil companies.

Claiming that there would be no consequences for not paying our debts on time is also deceptive, because there would be moral consequences. (So, of course, would claiming worse consequences than we know to be true.)

4) Don't be selfish. Politicians should have the good of the country, not re-election, in mind. Seniors (I'm one of them) should have the good of the country, not expectation of social security income rising faster than inflation, in mind. Businesses should not be greedy. Neither should labor unions, and workers in general.

I am not particularly fussing at Speaker Boehner, just using him as an example. Apparently he has been making a good-faith effort to get us out of this current mess.

God help us all!

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On July 22, 2011, I added the next to last paragraph, and made some additional changes.


atlibertytosay said...

I think a common mistake for taxpayers to make - is that the U.S. home individual taxpayer is the only revenue source our government has.

Governments makes money on loans, by collecting port (import & export) and excise taxes, fines, tolls, and by selling (and leasing) land, licenses, and other assets. Don't forget admission to events and Rec registration and concession sales for municipalities.

Another common mistake, and in my mind, you made is that taxes don't hurt business. I think Liberty SC is a great example. Property taxes, sales tax, and business license fees in Liberty are so high that business is actually shunning Liberty. I have 1st hand reports from large business owners who would have LOVED to move here, but they feel the tax structure (the 2nd highest in the County ~ Clemson is 1st) is too high. So yes, taxes do kill jobs - at least in a round about way.

I think the debt ceiling should probably be raised but the flip side is that there is a huge concession to reduce federal spending significantly. The less the government has to take in, the less it will eventually collect.

I think the Left Behind books address this a little. The books posited that the AntiChrist will step in and get all debts cancelled and this in turn would make him popular for solving world problems but also catalyzing a war with China and Arab nations.

I also see first hand how much waste there is in government. My wife recently received a 14k gold filled pin commemorating her 10 year work history. While small, she didn't want it, need it, and an announcement that she was an awesome and appreciated worker would have gotten a bigger smile and bigger memory.

One could literally eliminate 20% of the budget if the government were run like a family business.

Bud Bence, a Wesleyan historian, says that you are expected to use reason, when interpreting the Bible - I think you have certainly done that and nothing you've stated here is unreasonable and therefore implied in the Bible.

Quick on ethanol: Some sources say that because so much corn is going into ethanol - most everything that has high fructose corn sugar has seen a 20% increase in prices over the last two years. HFCS is IN ALMOST EVERYTHING! So, in a way, it is a tax. Most food is 10% to 20% higher than it was just 5 years ago.

As for unions: Unions mostly have greed in mind. Some union efforts are just, but only some. The main goal of a union is to rise and fight against - not to be a true union of minds.

I honestly think waste and subsidy trimmed out of the budget which would lead to reduced spending would begin to fix our problems.

America is great because we have liberty and we are free. Government is an instrument of force - a body that can take away your liberties. We aren't just free as in slave or bond, we are mostly economically free $$ wise. All you have to do is work or ask for money in this country and you are given it (by someone) if you ask nicely or work with gratitude and perseverance.

Martin LaBar said...

Thanks. I don't think I said that taxes don't hurt business. They can. They can also, used reasonably, make it possible for businesses to operate. I was objecting to the blanket statement "taxes kill jobs." They can, but certainly not always. And Speaker Boehner has been talking against closing loopholes, not about anyone's proposal to, say, raise the income tax. His statement was, at best, a gross oversimplification.

You are right, there are other sources of revenue. However, based on the noises coming out of Washington, from all sides, they must not be as great a source as taxes.

Yes, unions are greedy, many times. So are businesses.

I have not read the _Left Behind_ books. Based on what I've read about them, at least some of their eschatology is built on flimsy ground.

Thanks for your comment.