Almost unnoticed among the leaked proposals in the president’s forthcoming State of the Union message is the doubling of a child care tax credit for families earning less than $85,000 per year. It is one more example of targeting bribes to specific voter groups; and, in turn, it is one more example of how increasing government also increases complexity and unpredictability in the law. The Constitution says that taxes “shall be uniform throughout the United States.” If taxes are uniform, then a level playing field is given to all citizens. We all have an equal right to life, liberty, and the pursuit of happiness through the law. When we change the rules, we make it harder to know what directions to turn our energies. A progressive income tax starts the problem and when we introduce other laws to punish some groups (usually small voter groups like those earning over $250,000 per year) and give their wealth to other groups, we make life more unpredictable for families and we shift incentives for starting a business, ending it, or sending it overseas.
In the last 100 years, the two periods of strongest economic growth were the 1920s and 1980s. During both of those periods, we slashed the top marginal income tax rates from about 70 percent to about 25 percent. The U. S. economy dramatically expanded after this burst of freedom, and tax revenues into the Treasury increased sharply. Presidents Coolidge and Reagan had two of the lowest misery index rates of any two presidents in U. S. history = and both were overwhelmingly re-elected. In Coolidge’s case, his Democratic opponent received a pitiful 28.8 percent of the vote, and in Reagan’s case his Democratic opponent carried only one state. Employment boomed and inventions flourished (from sliced bread to radios to zippers in the 1920s).
When we make the tax code more complicated, and when presidents use it to reward some voters and punish others, our nation loses personal liberty and economic progress.
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Flat tax would eliminate the IRS and these voter bribes. Since the Fed is manufacturing money every day, there is no need for anyone to pay income taxes, ever. Inflation is the tax we end up paying, hence the misery that it brings in reduced buying power for the poor and middle classes. So much for redistribution of wealth, the progressives are only good at equally spreading misery and loss of liberty for all with irresponsible spending and expansion of government.
Another way to encourage mothers to work and let someone else take care of their children.