My how that escalated
America celebrates many holiday’s throughout the year; a country known for its rich history in such a small amount of time has many dates to celebrate the joyous and painful memories of the fight for freedom and liberty. However, October 3rd is not a finer moment for America. On October 3rd, 1913, America was introduced to the income tax by President Woodrow Wilson. A tax code that once contained only 400 pages has reached 73,954 pages today. Such complicated laws have hindered the incentive for creating wealth and have stopped economic freedom in America.
When a society is taxed above a certain percentage, they lose the incentive to make money because all the hard earned money is taken away by government. This is the principle of the Laffer Curve, which states that people have an incentive to work less when more of their money goes to the government. Currently, Arkansas has one of the highest income tax rates in the country. Ranking 15th in the country for income tax at 7%; Arkansas also has the 2nd highest sales tax in the country at 9.18%. These taxes damage the incentive for Arkansas to create wealth because so much of the hard-earned money goes to paying government. Paying more than the average state, Arkansans spend about 10% of their money to fund government. Let’s say one makes $100 per year, this means that person only received $90 for the year and $10 went to the government. Based on last year’s tax distribution statisitics, 4% of income collected went to fund “other” programs like government salaries. In our example, this means that only $6 will actually go back to helping people, provided the operation in place to help is completely efficient and won’t cost more than predicted… Economic freedom would enable the people of our country to keep that $100 and use it how they want and would create an incentive for people to help people.
Now, it is illogical to believe that anyone is arguing against helping American’s prosper; there are just better ways to help everyone. When an inefficient and ineffective organization claims to help those in need, people are more willing to give them $10 and forget about the problems our country faces because “someone else will take care of it.” But, as we have seen, this money doesn’t actually go to creating real solutions. Economic freedom in the market creates awareness and fixes what needs to be corrected much faster than centrally controlled finances. The incentive to create wealth means the market is willing to change and fix a social need much faster than an organization that has resources to bail itself out and continue to run inefficient programs. When Americans are free to keep their own money and not pay these high taxes, they could give their $10 directly to a program of their choice with no middle-man involved and there will be a clearer vision of what we need to improve first because it will not be about the politics and the votes; decisions will be made to help America prosper and to create more wealth that mutually benefits all.