Why Only Lower Small Business Taxes?

In watching the presidential and vice presidential debates I notice whenever they talk about lowering taxes for businesses, they are quick to point out it is for small businesses. Same thing in Canada. During political debates, they tend to focus on small businesses, while big business is vilified. It's usually said that big businesses should be taxed more because of their profits. This position makes no economic sense to me. But maybe that's the point. It's probably just another political way of gaining support. People image small businesses as being run by ordinary folks just trying to eke out an existence. On the other hand, "big business" is run by shadowy Wall Street figures who we never see in real life who live in Bel Air Mansions and have several servants. A couple of generations ago, these guys were depicted in cartoons as very rotund men who always wore top hat and tails and smoked a cigar. There is a HUGE flaw in this reasoning though. Think about the ordinary everyday products we buy. For example: Kellogg's cereal, Ivory soap, Hanes underwear, Cottonelle Toilet Paper, Esso Gasoline. These products are all manufactured by big businesses. Taxing these companies will only increase the price of the most common goods we buy. This will especially affect poor people who buy most of their products from large companies. On the other hand, small businesses, especially in the United States and Canada, often produce goods which are specialty items, whether specialty clothing, unique leather bags, fancy cars, etc. Who buys these products? Rich people! So ironically, by taxing big businesses at a high rate but letting small business off the hook, you are only helping the rich and hurting the poor. Talk about unintended consequences. Large companies have many attractive features which should be encouraged. They are able to take advantage of economies of scale. By producing in huge quantities, they can lower the cost per unit. Processes are streamlined. Also, large companies can make huge investments in facilities which are able to produce things quicker and easier. Taxing away this money will take money away from increasing production. Many people have a negative feeling toward the high profits many large companies seem to make. This should not be a cause for concern, however, in a free market. High profits entice competitors to enter the market. In order to maintain a high profit level, companies must be that much more efficient than their competitor. Otherwise, they will be priced out of the market. Profits, numerically speaking, may seem high. But often profit expressed as a Return on Investment, is not so extreme. In fact, it is very often much higher for small businesses. A small business might earn a 15% ROI out of total revenue of $1 Million - in other words, $150,000. On the other hand, a large company might make only 8% ROI, but when it out of $1 Billion revenue, it comes out to be $80 Million profit. Numerically this is much bigger and seems much higher to people, but the rate of return is in fact lower. The bottom line is, higher taxes on big businesses will not help the common man, but will indeed hurt him more.

Who teaches our children?

Who, I ask, has the primary responsibility and duty to teach children? My answer is the parents. What's your answer? I'm willing to bet most people would not answer "a private organization with a particular agenda". Well, unfortunately for people in Canada, the latter is the case. This private organization is called a union and the vast majority of teachers, especially public school ones, belong to these.

There was a time when unions were just an economic idea for collective bargaining. It allowed groups of people to come together to get a better deal for themselves, and the theory is there is power in numbers. The workers vs. the owner is better than a single worker vs. management. That's the theory, although I do not agree with it.

Anyway, my point is that used to be the case. No longer. Unions now have official positions on countless issues. For example, they may be pro-Palestine and anti-Israel, they may be pro-gay marriage, they may be officially in favor of teaching children about all kinds of sexual perversion before the age of 10. And parents have no say. Every teacher in every public school MUST adhere to these ideologies, even if they have nothing to do with education. The union can determine who can or cannot be a member. Members dues are often used to fund many of these positions.

The idea for this article came about when I read that BC teachers are now officially opposed to the Northern Gateway Pipeline. This is the official union position. I have no idea why a teachers union would need to have a position on this in the first place, but that's how it is. They will then use this power to make sure every child is taught that the pipeline is a bad thing and they should be against it.

This does not sound like a free society to me. It sounds like a few people in charge of dictating what children will learn. Math and science typically don't have much debate. It's on these other issues which have legitimate disagreement. There should be freedom in this area. The only way to correct this problem is to allow school choice and end the enormous powerful teachers unions and their influence over children.

Romney

Of the two candidates for American president, I prefer Romney. However, I still have many issues with the Republican candidate. Part of the problem is inherent in our modern conception of politics. When the rubber hits the road, people vote for the candidate that will benefit them most personally. Promising benefits to a voter, even at the expense of others, will still get a vote.

So Romney, like Obama, has set about to give promise after promise about how he will make your life better. Romney will improve education, he will get you a job, he will spend more on military, etc. He claims to be all for smaller government, but this claim is hard to sustain when he is also promising everyone more from the government.

I applaud Romney for wanting to liberalize the economy, but it's really just skimming from the top. In theory, Romney is more in favor of the free market, but his advocacy of it is only as strong as the people will stomach. Obama on the other hand truly believes in socialism. He believes the government is always the solution and that if things don't work out, the government simply needs more money or better people.

This is why I am skeptical of the conservative-liberal paradigm. Both are fundamentally the same in believing they will use the coercive power of the government to "make things better". They both fundamentally believe the government just needs smarter bureaucrats, that departments just need more funding etc.

That's why I am a fan of Ron Paul. He wants to reduce government, not make it bigger. He is already skeptical of the gov. to make things better. He would rather let people be as free as possible. Meanwhile, the two dominant presidential candidates disagree with this. They want the power of government to fix the economy, something I think is impossible.

IT DOESN'T MATTER WHAT YOU THINK!

Democracy can be quite annoying! Canada has always striven to be free, at least historically. Freedom and democracy are often incompatible. Unfortunately, rather than individual liberty, Canadians now seem to embrace the idea of collectivism and socialism. We have drunk deeply from the cup of democracy to the point where we think we can and should vote on everything. Instead of freedom, we believe in imposing our will on everyone else and controlling their lives for their own good!

People must be free to make their own decisions, even if everyone else thinks they are wrong. Unfortunately no one thinks like this anymore. People will say something should be banned simply because they disagree with it. They think certain religious practices should be outlawed because they don't personally like them. They want certain foods to be banned because they are unhealthy. They think to take away someone else's freedom is totally acceptable as long as it is the "right" thing to do.

This is a total perversion of freedom. We have to ask the government permission every time we want to be free, and a handful of "experts" will inform us if we can make that free choice. Does no one else see the irony in this?

It's like freedom of speech. You cannot dictate that freedom of speech only exists if we are sure those using it will use it for some good purpose. The whole idea behind free speech in the first place is that some people will abuse it, but this is part of the risk we must take.

The point is, you cannot limit freedom because you think you are somehow doing someone a favor. How is this different from communism? So when you are in a discussion about a particular subject, the pertinent thing is not whether or not you "like" something, but rather whether or not you want freedom for yourself or others.

Does the GOV own everything?

There are two rival ideologies. According to the first, people are the masters of their own domains. If you go into the forest with the permission of the land owner, use an axe you bought to chop down a tree, and sell the wood, then you are entitled to the proceeds from that sale. This is not because anyone authorized you to have those proceeds, but it is a human right that you own what you produce.

This ideology is countered by one which is becoming very popular which says the government owns everything. It owns your forest, it owns your saw, and it owns your labor. It essentially owns you. At the end of the day, it is up to the government to decide how much of what you produced you can keep. People who espouse this point of view do not see any level of taxation as inherently wrong. They only consider what they believe to be most effective.

According to those who espouse the second point of view, if a planned socialist economy worked "best", then the government has the full ethical right to establish it. People are simply cogs in a giant wheel. You do not own anything, you are simply a government employee.

Few people nowadays seem to make arguments about this from a moral perspective, rather they focus on a practical perspective. Increasing taxation is only bad if it has negative consequences, which are defined by those who advocate this point of view. I believe a strong case can be made from a moral standpoint. We can start by someone explaining to me how taxation is not a form of theft. First, define theft and then explain how that is not what the government is doing.

California wants to ban gay-to-straight therapy

In another example of government overstep, California wants to ban any group which has as its goal to change people from gay to straight. Think what you like about this endeavor, the bottom line is the government is using its police and military to stop people from voluntarily associating and transacting business. The government is not meant to be thought-police and the types of therapy you receive should not be banned simply because some government officials have a different point of view.

Government Investments

Newfoundland set up a fund to attract new business to the province. Earlier this year it was revealed that 98.5% of this fund went unused. Companies did not come here to do business despite this bribe. Despite this, I'm sure there were many people hired in the "business department" to attract new business.

Just more government spending gone down the drain as usual. You see, the government should not be "investing in anything.". If someone in the province wants to make money, let them invest their own money. It should be a free choice, not money stolen from me to invest in some rinky dink company from around the bay.

Besides the theft, how does the government even know how to invest the money? Where do they get the handful of "experts" who will know which businesses to invest in? Two things can be said about this:

1) Gov. officials probably don't know much about business investment. If they did, they would not work for the government.
2) Any money that is invested is probably not done so on the basis of profitability, but rather done on the basis of some vague notion of regional development. Maybe an MHA wants to bolster his reputation in a particular area so he will invest there. Or maybe some industry is highly visible to the public and will make the gov. look good. These are the most likely reason politicians invest.

The bottom line is, I don't want a bunch of bureaucrats who can't make it in the real world to invest my hard-earned money in order to get more votes.