BY RUSSELL TURNER
COMPOUNDING GOVERNMENT
Anyone who has ever had a savings account knows the wisdom of placing your interest earnings back into the account and letting the earnings themselves collect interest. This practice is referred to as collecting compound interest. In today’s savings account the interest rate has been manipulated by the government, and the amount paid today is but a fraction of what savers made not that long ago. When interest rates were higher an investor could grow his or her money at a respectable rate, sadly that is not true today. The concept of compounding interest is beneficial, but we are experiencing a compounding of government which is not so beneficial.
Here in Oklahoma some reports claim that state tax revenues are going to be short to the tune of 900 billion dollars for the next fiscal year. I have heard several proposals to solve the problem; from placing a tax upon soft drinks, to taxing services, and increasing the tobacco tax among other things. In my opinion one of the things that people in government simply cannot understand is when tax revenues are low it is merely an indicator of the state of the economy. When people are out of work and not having a good income they don’t spend as much, thus there are fewer tax dollars. Over the past 12 months, Bureau of Economic Analysis statistics showed average personal income in Oklahoma was essentially flat: down 0.3 percent and 0.4 percent in two quarters, up 0.3 percent and 0.4 percent in two others. Oklahoma workers see prices rise but not their ability to pay them. These numbers put our state in last place for personal income growth in the nation. All this is going on while government bureaucrats and elected officials continue to complain that they are not paid as well as their compatriots in other states. We continually hear the justification that we must pay our government workers more to attract more talented people, while we at the bottom of the food chain are rated at 50th in 50 states.
All of these proposals are similar to trying to give a drowning man a drink of water. I am a small businessman and I know many others. While our elected leaders often speak of the virtues of having a living wage, the need for saving for retirement and having health insurance is merely a dream for many small business owners; far too many are, for the most, part just living from day to day. Most of them are unable to save for the future, and purchasing health insurance is only a fantasy. The proposal to tax services will completely backfire if our legislature is foolish enough to pass such a thing. For instance, a person who operates a one person barber shop would have more burdens placed upon them with the requirement of charging and collecting a tax upon their service. Bear in mind they already pay an income tax on their earnings. The increased book work will cause many to go out of business. In the last legislative session we went through this same garbage; we have had enough of hidden fees placed on our cell phones, car tags and everything imaginable. Instead of government cannibalizing the taxpayer, stop increasing and compounding government and live within your means. Unlike compounding interest, compounding government only makes us poorer.
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