400 Capitol Street, NW
Washington, DC 20001
- Toll Free 1.888.564.6273
- Local 202.783.3870
Government goes to those who show up. FreedomWorks makes it easy to hold your elected officials accountable in our fully interactive Action Center.
Find activists, groups, and events right in your own neighborhood. Join FreedomConnector to get involved and learn more about key issues threatening our economic freedom. Whether you’re looking for like-minded people, trying to boost your existing group’s impact, or simply trying to stay up on current events, FreedomConnector is the place to start. See what’s happening in your state today!Get Connected
400 Capitol Street, NW
Washington, DC 20001
Collecting more taxes than is absolutely necessary is legalized robbery. —President Calvin CoolidgeSt. Nick and Taxes
Once upon a time, there was an original St. Nicholas. It's true; he was Nickolas of Myra (now southern Turkey), and he was a very devout Christian and generous man. As a young man, he secretly gave gold to three young girls, providing a dowry for marriage and preventing them from being sold into slavery and prostitution. Later, he became an important leader of his community. As a bishop in the Christian church, his people were starving, and ships filled with grain were anchored in a nearby harbor. Bishop Nickolas convinced the sailors that divine intervention would replace the siphoned off grain before it reached its destination.
"Father, we dare not because our cargo was measured at Alexandria and we must deliver all of it to the Emperor Constantine!"
Bishop Nickolas answered, "Do what I tell you, and upon your return, the Emperor's Officers will not find the cargo short!" Legend claims Constantine received the entire cargo as originally shipped.
To those of us who know excessive taxation destroys freedom, it is interesting to learn about St. Nicholas' negotiations with Emperor Constantine to lower his cruel and excessive taxes on the people of Myra.
Bishop Nickolas went to the capitol, pleaded with Constantine to lower the taxes on the people of Myra, and Constantine greatly reduced the taxes. Bishop Nickolas asked to have the imperial decree be made in writing. And legend claims, Bishop Nickolas tied the decree to a stick and threw the decree in the ocean, which was received by the people of Myra.
A few days later, Constantine was persuaded by his finance minister that the tax rate was too low and the empire needed more revenue. Bishop Nickolas was called back to the imperial palace and was told by Constantine of a revised higher rate. Bishop Nickolas told Constantine that lower tax rate was already in effect. Constantine sent a runner to Myra, and lo-and-behold the lower rate was indeed the law. According to historical claims, the people of Myra enjoyed the low tax rates for about a century.
Okay, this is about year 320 A.D., and legends and myths abound. But, what is a constant fact? The amount and form of taxation defines and controls a society. It was true in ancient times and is still holds true today.
Constantine ruthlessly taxed as much as could be tolerated to consolidate his imperial power. The citizens of Myra knew the heavy tax burden was confiscating their time, work and entrepreneurial advancement. They formed a special-interest group and appointed Bishop Nickolas to make their case for lower taxes before the mighty Emperor Constantine. Early on, Constantine accepted Christianity as his church, and, during his reign, Constantine consolidated his power primarily through two forces: enormous taxes and the church. Hence, Bishop Nickolas was the perfect envoy to reduce the taxes for the people of Myra. Constantine granted a favor to a powerful church leader – lower taxes - in exchange for the Bishop's loyalty.
Ah... politics where power and taxation are always present, and special-interest politics always lurks. The Saint protected his people. The Emperor expanded his power. Good people, even Saints, are often ruthlessly used by men of power.
Enough about politics, power and taxation. The life and legend of St. Nickolas morphed over time into a jolly, gift-giving man called Santa Claus! Read the article on Adam English, an associate professor of religion at Campbell University in Buies Creek, N.C., and his book, “The Saint Who Would Be Santa Claus.”
Personal Freedom and Prosperity 104: Taxes Diminish Personal PowerCollecting more taxes than is absolutely necessary is legalized robbery. —President Calvin Coolidge
Collecting more taxes than is absolutely necessary is legalized robbery.
—President Calvin Coolidge
Taxing beyond public safety diminishes the freedom of the person taxed.Medical Device Tax Destroys Jobs and Research
To fund ObamaCare, a 2.3% tax on medical devices was included in the law. On January 1, 2013, this tax will be activated. The "medical device" tax exhibits an enormous impact on businesses, employees, medical research and patients. In short, taxes reduce the economic, creative and productive powers of the people directly taxed. Additionally, taxes reduce product advancement and choices for consumers – every American.
The medical device tax is already destroying jobs. Lev Melinyshyn of the medical device maker Uresil in Skokie, Illinois explains why he laid off around 10% of his employees:
"We had never laid off anybody," he added. "We bought the company in 2004, never had a layoff. In fact, even during the recession, we added jobs.... It wasn't until this tax hit us that we had to do it."
Melinyshyn is also halting product development, which harms American consumers. "A lot of patients, I think, are not going to benefit from new technologies," he noted. "We've literally put all of our new product development on hold ... so we can afford to pay the stupid tax."
Significantly and harmfully, the ObamaCare tax is taking money from private entrepreneurs that are providing and improving products for the benefit of consumers. Murray Rothbard, a libertarian economist of the Austrian School, explains:
The productivity of the private sector does not stem from the fact that people are rushing around doing "something," anything, with their resources; it consists in the fact that they are using these resources to satisfy the needs and desires of the consumers. Businessmen and other producers direct their energies, on the free market, to producing those products that will be most rewarded by the consumers....
Again, the ObamaCare tax takes from the productive private economy, which provides valuable goods to the American consumer. Now, because of the ObamaCare tax, people are unemployed and product development is stopped. Worse, the tax revenue fuels a very bureaucratic, inefficient and coercive government program - ObamaCare. Writing 50 years ago, Rothbard clearly understood the harm now being caused:
… the public sector can only feed off the private sector; it necessarily lives parasitically upon the private economy. But this means that the productive resources of society — far from satisfying the wants of consumers — are now directed, by compulsion, away from these wants and needs. The consumers are deliberately thwarted, and the resources of the economy diverted from them to those activities desired by the parasitic bureaucracy and politicians. In many cases, the private consumers obtain nothing at all, except perhaps propaganda beamed to them at their own expense. In other cases, the consumers receive something far down on their list of priorities
Sadly, the medical device tax and many more ObamaCare taxes are hurting or will hurt our economy, employment and medical advancement. So far, ObamaCare has not decreased the cost of medical care. As Rothbard noted, America has only received a lot of propaganda at our own expenses.
Personal Freedom and Prosperity 104: Taxes Diminish Personal Power Collecting more taxes than is absolutely necessary is legalized robbery. —President Calvin CoolidgeTaxing beyond public safety diminishes the freedom of the person taxed.
“The power to tax is the power to destroy.”
-Chief Justice John Marshall
Every tax imposed by government diminishes the power of the person taxed. Excessive taxation obstructs choice and entrepreneurship, which restricts freedom and prosperity for the individual taxed and the entire community.Cut Spending – Cut Taxes: Sweden – Ryan – Tea Party Budget
“Austerity has failed,” is the mantra of the proponents of big government in America. Seeking to enlarge central control, these predators of the governmental dole are singing in unison, “Look at Europe.”
Okay, let’s inspect Europe. Most of Europe raised taxes, nibbled at “cuts,” and expanded deficits. Their economies are terrible.
However, there are two notable exceptions. Since 2009, Germany and Sweden cut spending and balanced their budgets, which produced good economic growth, substantially better than the economic growth of United States and the remaining European countries. Robert Barro a Harvard economist reports in the Wall Street Journal:
Two interesting European cases are Germany and Sweden, each of which moved toward rough budget balance between 2009 and 2011 while sustaining comparatively strong growth—the average growth rate per year of real GDP for 2010 and 2011 was 3.6% for Germany and 4.9% for Sweden. If austerity is so terrible, how come these two countries have done so well?
Veronique de Rugy of George Mason University succinctly states: The answer is that they constrained spending without jacking up taxes.
Spain, Greece, Italy and most of Europe really didn’t impose austerity – the cuts were insignificant. They continued to spend and increased taxes. Resultantly, these countries continue to stagnate economically.
Instructive is the culture and economic transformation in Sweden. Yes, Sweden the home of central government and high taxes – the benevolent government, adored by socialists everywhere. Sweden has changed. They are reducing taxes and cutting spending. Sweden’s Finance Minister, Andres Borg, reasoned that government policies – high taxes and rigid regulatory controls - had caused decades of economic stagnation.
Sweden was a textbook case of European economic sclerosis. Very high taxes and huge regulatory burden.’
In January 2007, Borg and Prime Minister Fredrik Reinfeldt cut taxes, and began to balance Sweden’s budget by cutting welfare benefits. Yes, they cut welfare benefits and cut taxes and balanced the budget – in Sweden! The excessive welfare state had encouraged less work and less productivity. Borg explains how they framed their message. The Spectator writes:
‘We are the new workers’ party.’ Tax rates would be cut for workers, and welfare cut to pay for it. High welfare levels, he says, can inflict cruelty in the name of compassion. ‘People emigrate from the labour market. Unemployment traps capture a lot of people in social exclusion.’ Tax cuts are not spoken of as an ideological aim, but as a tool to cut unemployment and advance social justice.
When the Great Recession spread to Sweden, Borg rejected the almost universal call for deficit spending. His stimulus was more cuts in spending. Borg explains in The Spectator:
‘Look at Spain, Portugal or the UK, whose governments were arguing for large temporary stimulus,’ he says. ‘Well, we can see that very little of the stimulus went to the economy. But they are stuck with the debt.’
Note, Sweden has the highest growth in GDP in Europe. Obviously, Borg knows wealth, investment and entrepreneurs are essential for a vibrant economy and prosperity. A vibrant economy advances science, art and the standard of living for the entire society. Totally contrary to “tax the rich” chant in America, Borg is enticing entrepreneurs and the wealthy to invest and live in Sweden. Borg has cut the taxes on the rich – again in Sweden!
If you have a high wealth tax and an inheritance tax, people emigrate because it becomes too costly to own a company. Ownership is a production factor. Entrepreneurs are a production factor. Yes, these people are rich and you can obviously argue that we want to encourage social cohesion. But it is also problematic if you drive out entrepreneurs from your country, because they are the source of job creation.’
Compare the cultural and political climate of Sweden to the United States. In 2011, Representative Ryan introduced his spending cuts – The Path to Prosperity - and President Obama invited him to a presidential speech, where the President ridiculed Ryan. Then, the Democrats spent millions on a video showing Ryan pushing a grandma in her wheelchair off a cliff. In the meantime, President Obama and his academic elites increased the deficit by more than a trillion – all in the name of stimulus.
Harvard’s Barro believes these deficits – totallimg over $5 trillion in four years – had a modest impact in 2009 and a negative role in 2011 and 2012.
For the U.S., my view is that the large fiscal deficits had a moderately positive effect on GDP growth in 2009, but this effect faded quickly and most likely became negative for 2011 and 2012. Yet many Keynesian economists look at the weak U.S. recovery and conclude that the problem was that the government lacked sufficient commitment to fiscal expansion; it should have been even larger and pursued over an extended period.
Of course as Borg indicated, now America has more debt – horrendous debt.
Right now, Ryan and the House Republicans are attempting to reduce spending, and to eventually balance the budget. Exactly the opposite, Majority Leader of the Senate, Harry Reid (D-NV) vows to stop any spending cuts. Reid always seeks to increase the power and reach of the central government. In reality – especially compared to Sweden – Ryan and the House Republicans have a moderate proposal. This is politically understandable. The Democrats continue to demagogue The Path to Prosperity and establishment-Republicans are very queasy.
Remember, Andres Borg convinced the people of Sweden that fiscal austerity was good for all Swedes. Sweden cut spending and taxes. The economy and employment expanded. Likewise, Paul Ryan proposes to cut spending to expand the economy and employment. Borg cut welfare benefits. Ryan seeks to restructure many federal programs to the states and local community. Ryan speaks of “subsidiarity,” which is a Catholic philosophy that focuses on the actual person, rather than a class of people, e.g., the poor and unemployed. Rather than classes of people controlled by rules, regulations and bureaucracies of a central government, Ryan proposes community and individually based solutions. The Acton Institute explains:
This tenet (subsidiarity) holds that nothing should be done by a larger and more complex organization which can be done as well by a smaller and simpler organization. In other words, any activity which can be performed by a more decentralized entity should be. This principle is a bulwark of limited government and personal freedom. It conflicts with the passion for centralization and bureaucracy characteristic of the Welfare State.
So far, Ryan has quietly spoken of subsidiarity and local governance. Andres Borg observed that welfare “traps people in social exclusion.” Ryan’s “subsidiarity” returns welfare to the community where true compassion and individual charity excels. However, Ryan and all of us that believe in government closest to the people must articulate and expand our philosophical and moral message to more Americans.
In addition to directly helping people in need – subsidiarity, We the People must set a goal for reducing taxes for all Americas – including the rich. Andres Borg appreciates the entrepreneur and is beginning to entice them back to Sweden. Likewise, America – truly the home of the entrepreneur – must foster opportunities for every American to expand their capacities – to combine creativity with savings to innovate and invent. This is the philosophy and process that made America exceptional, and will restore economic growth and prosperity.
Finally, a fiscal message – austerity – is not enough. We the People must convey the fiscal and human good that is part and parcel of limited government.
Fiscally, a majority of Americans want small, restricted and locally-centered government. The best proposal to reduce federal spending and balance the budget was produced by The Tea Party Debt Commission. Thousands of Americans participated in producing the Tea Party Budget which cuts spending by almost $10 trillion in 10 years.
Now, We the People must communicate with our fellow Americans, presenting our version of the fiscal, cultural and moral renaissance. Decrease the confiscatory and autocratic power of government and increase the power and responsibilities of family and community. Cut taxes and bureaucratic despotism, freeing all Americans to save, invest and expand their economic and social powers.
Bluntly, if America wants to remain an economic and cultural power, America must return to its roots – a government of limited powers. This is the fiscal and cultural war that now besets America. The political elites and their predatory special interest groups – Wall Street, big unions, government bureaucracies and big business – versus most Americans. About 30 percent of Americans favor the political elites and 70 percent are strongly opposed. Our opportunity and mission is to reach the 70 percent with the economic, moral and political alternatives to our present malaise and decline.
Personal Freedom and Power 104: Taxes Diminish Personal Power “The power to tax is the power to destroy.” -Chief Justice John Marshall Every tax imposed by government diminishes the power of the person taxed. Excessive taxation obstructs choice and entrepreneurship, which restricts freedom and prosperity for the individual taxed and the entire community.
Personal Freedom and Power 104: Taxes Diminish Personal Power
Collecting more taxes than is absolutely necessary is legalized robbery. -President Calvin Coolidge
Every tax imposed by government diminishes the power of the person taxed.The Right Way to Balance the Budget
To stabilize the national debt, taxes must be raised by 23percent, expenditures reduced by 23% or a combination of tax increases and cuts. The political elites, e.g., the Bowles and Simpson debt commission, are proposing some cuts and significant tax increases. Offensively, the Obama Administration ran up the debt, while planning to enact an additional VAT tax.
Americans be warned; any increase in taxes will be spent by the politically powerful, which will reduce every taxed American’s power over how we spend and invest the fruits of their labor. Worse, a tax increase will lead to more spending and delay and retard debt reduction efforts.
Utilizing the ground-breaking work of Alberto Alesina and Silvia Ardagna of Harvard, Andrew Biggs, Kevin Hassett and Matt Jensen of the American Enterprise Institution (AEI) studied many governments’ attempts to reduced debt and found that major spending cuts is indispensable:
The data also clearly indicate that successful attempts to balance budgets rely almost entirely on reduced government expenditures, while unsuccessful ones rely heavily on tax increases.
The AEI study found reducing transfers/entitlements and government wages was also essential:
A 1996 International Monetary Fund study concluded that "fiscal consolidation that concentrates on the expenditure side, and especially on transfers and government wages, is more likely to succeed in reducing the public debt ratio than tax-based consolidation."
The research is strong, cut entitlements/transfer payments and wages. The political elites will surely resist. Alas, it is the same political class that created the debt and the danger.
Once again, change will not happen within government. It will be up to the American people make it happen. Our goal should be to match the reductions achieved by Finland, 108% reduction of spending followed by a tax cut.
As French economist Jacques Attali forewarned, our enormous debt threatens our civilization. Again, the citizens must force spending cuts by demanding the reduction of government workers and restructuring entitlement/transfer payments.
Personal Freedom and Power 104: Taxes Diminish Personal Power Collecting more taxes than is absolutely necessary is legalized robbery. -President Calvin Coolidge Every tax imposed by government diminishes the power of the person taxed.