Wednesday, June 16, 2010

Temporary Tax Breaks for Temporary Employment

Our politicians must not care about the high rate of unemployment. If they did, they would create permanent tax cuts.  Even better, they would implement a flat tax as proposed by Chris Edwards and Daniel Mitchell.  Permanent tax reforms would help us to achieve the goal of long term economic growth and permanent economic stabilization. However, unfortunately, this is not what our politicians want.  Our politicians would like to create short term tax cuts or one time tax rebates so that they can claim their policy is responsible for growth. Any economic downturn, of course, is the fault of their predecessor.

Even worse are the auto and home subsidy programs that help the boom and bust cycle thrive by way of malinvestment:

Barrons:  
"That $8,000 subsidy costs $43,000 per extra house sold, assuming it doesn't grow to $292,000."

Barrons:  
"The Bureau of Economic Analysis figures the average expenditure per car is $22,000."

Again, the temporary nature of the aforementioned policies is consistent with the hubris and selfishness of our elected leaders. They believe that they are being "fair" by keeping taxes high and redistributing the tax revenue as they see fit.  The problem is that most of them achieved their positions with hollow rhetoric and blatant corruption
and none are familiar with the practice of allocating scarce resources efficiently.  No better example of this hubris is Chuck "The Earmark" Schumer, who travels all over New York State during college graduation time, proclaiming to recent graduates and their families that he will support a tax cut for those who wish to pursue higher education.  It only takes an economic catastrophe for Schumer to support a one time tax cut for college students.  That is, the hypocritical arrogant elitists such as Chuck Schumer want you to believe that the government giving you back your own money is some sort of favor.

0 comments:

Post a Comment