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logo    The Truth About Taxes


So, you say, "No to ad tax" and "avoid damaging the economy." True enough! But the truth is trivial; it applies to everyone. If I had the money I pay in taxes in my pocket, a lot of Texas businesses would be selling quite a few more products. But alas, governments need money to operate, taxes will be paid, and the economy will be damaged unless personal income rises faster than the tax rate.

But taxes aren't the only culprit. Because of the political philosophy that is popular in this state, Texans can boast of having one of the lowest rates of per capita income and the highest rates on products and services that have little economic elasticity. There are few if any alternatives to purchasing them. This political philosophy has been named pro-business, but a little bit of arithmetic proves that it isn't.

Businesses thrive where people have large amounts of discretionary income to spend, not where they don't. When our elected officials--don't dare call them representatives--legislate the interests of highly lobbied industries, the dollars sucked out of the economy by these industries are dollars that won't buy products and services in Texas stores. And every product not bought is a profit lost to some Texas business.

What I find astounding is that the Texas business community has swallowed this political line even though I don't believe that that community believes that it can be more prosperous avoiding taxes that it can be selling products and services.

Except for the prosperity that came to some Texans from the oil boom, Texas has never been a very prosperous state, even though its political leaders have been putting this philosophy into practice for decades. If the Texas business community were thoughtful, it would evaluate a philosophy by its results, and if after decades of trying, no results materialized, it would conclude that the philosophy needs to be changed.

The upshot is that we've had the wool pulled over our eyes. What we believe to be a pro-business philosophy is in reality nothing more that a special interest philosophy, and if our business can't pay the interest, the political power structure will ignore them.

So if you like trying to do business in a low per capita income state, continue putting these rascals into office. But if you truly want to prosper, you'd better start looking elsewhere. (DBJ 7/10/2005)