You have probably never taken time to consider the role of government in your life. Unless you’re a political junkie, you have no reason to do so.
Why should you care? The list is endless. For our firm’s clients, it is a a real concern just about every day of the week. Try and operate a business for any appreciable amount of time. You will undoubtedly have a not so good view of the government. Taxes. Regulations. Compliance. Inspectors. Ordinances.
The primary reason you should care about what the government does is because you pay for it. Let that sink in for a moment. You pay for it. The money does not magically appear. Even the money loaned to the government, you pay for.
But unlike other things that you pay for, there is no immediate gratification is there? You buy food from your grocer or grower. Medicine from the pharmacist or pharmacy. Fresh brewed coffee from your local Starbucks. Gasoline from the gas station.
But what do you really “buy” from your government? Most people have no idea, but it is not their fault. For decades our society has been conditioned not to think about our money being taken from our companies or your paychecks. And, come to think about it, your not buying anything are you. The government does it for you.
If your a business owner, you may be more sensitive to it, but, after a while, you accept it as a cost of doing business. It is something you cannot really do anything about. You just press ahead with delivering a quality good or service. If you do otherwise, like fret about taxes, your starve.
When your employer takes money from your paycheck every month and gives it to the government, what do you receive in return for that? Food? Medicine? Gasoline? Cell phones? Coffee? If you have a job, you essentially receive nothing. Nada.
But guess what, there are millions of Americans that are receiving what amounts to free food, free medicine, free gasoline, free cell phones and, yes, free Starbucks coffee. Then there is the free beer. And condoms too. THAT YOU PAID FOR! (all caps for dramatic effect, those of you who know me well know I do not shout. Much. Unless I’m really upset.)
Why pay taxes at all? What should you receive for your tax contributions to the federal government? It should be for things that have a huge impact on our lives. Common sense items such as safety and security, what the Constitution calls providing for a common defense.
Securing our borders and keeping out terrorists. A strong military and diplomatic corp to defend us. Yes, a strong intelligence community. A federal court system to resolve disputes among private parties. For state and local governments, a police force, a court system, and whatever the citizens of that state decide they want the government to do.
What we surely do not need is what we have today: a regulatory superstate within a state at all levels, local, state and federal. It is killing innovation and free enterprise. We need systems of governments that allow the private sector to thrive, not drown under red tape. A place where individuals, not the collective, are the mainstay of our growth. Where people help each other because it is the right thing to do, not because the government tells them they need to do so. Americans like choice. At least we used to.
If your working for someone other than yourself, you don’t have time or want to think about any of this. But you should. You need to. You should know that your hard-earned money is being taken from you, not by your employer, but by the government who is forcing the employer to tax you.
The government, in turn, takes that money that it forced your boss to deduct from your paycheck to pay for things that you may not agree with or need. Or, worse, paying for others in our society that refuse to work for a living. Hedge fund manager and author James Altucher says it is akin to slavery.
While I do not agree with his gratuitous sniping aimed “rich” people, Altcuher is correct that employees are, to a certain extent, modern-day slaves to their jobs or lifestyles:
40% [of your income] goes to Federal and State taxes. This is already after your services have been taxed at the corporate level, now your being taxed another 40% at the personal level. Note that only salaried employees pay 40%. Nobody else does.
The richest Americans pay less than 15% on average on gains in their net worth. That’s because salaried employees are slaves and have the least political power. Another 5-8% goes to taxes on everything you consume. Now we are almost at 50%.
Then, like most Americans, you have a mortgage. Maybe this is another 10-20% of your salary. Your company likes you to own your house because you are less likely to quit (you need the money to pay the mortgage) and you are less likely to move (you’re not mobile).
Then student loans you are paying off. For the first time ever, greater than 50% of the unemployed have college degrees. So it”s pretty scary. You got this degree because (in part) you thought it would get you a job. But it didn’t guarantee anything and now you have to pay for it. Some percentage of your salary is sliced off every month to pay for that degree.
Then some portion of your salary goes towards health, upkeep of your relationships (they always cost money. This is not being cynical. Just reality), your transportation to your job (they force you to pay for the honor of transporting yourself to your slavequarters).
How much goes to you? You wake up before dawn. You travel. You work hard. You come home late. You’re feeling stuck. You’re mildly depressed and may take medication for this. And you have trouble sleeping and digesting.
You get the picture. I see a lot of this in my line of work. Most of my clients are corporations. Small, medium, and publicly-traded, with a sprinkling of high-net worth professionals and business persons. Without exception, all of them agree on one thing: governments are making it a lot more difficult for them to do manage and grow profitable businesses or manage life in general.
Businesses that hire people, pay salaries, and ensure there is some modicum of civility left in our world. But the government is also a player in the market. We have made it one and it wants to play too. The government thinks it can play in this sandbox but it cannot. Never will be efficient enough to do so.
You would think that after we defeated the Communists during the Cold War we would avoid government-run anything? Thing is, there are people who think that defeat was two steps back, one step forward. They think they can do it better. Well, these people are wrong.
I know what some of you may be thinking, what a heartless idiot. Jason, what about all of the poor people and those who are very sick or old, and cannot work. Don’t they need these social welfare programs and the programs to survive? As Thomas Sowell has said many times before, government-run welfare is setting up people to fail:
If your reading this post on the Internet, I have special news for you: your probably not poor. At least not in the material sense of the meaning of the word, poor. I’ve seen poverty in this country. I’ve seen it in many foreign lands. People living in shacks, if lucky. No computers or cell phones. Little food. Healthcare? A luxury.
Want to witness true poverty, visit with the Missionaries of Charity or countless other Catholic religious orders that work on the front lines of this battle. They will show you first-hand what poverty is all about. You’ll probably not like. You will likely look away. The government knows this. It feels your pain.
There is no easy answer to combating poverty, disease, or many of the social ills that plague the world. But one thing is certain, governments make it worse.
The first and true line of defense for combating poverty or helping the sick must not be the government, look to yourself. Yes, you. When was the last time you reached out to a family member, neighbor, friend, or a stranger in need?
Allowing the government to fill a void that you and I should be filling is an act of selfishness. Read that sentence again. By allowing the government to fill that void you and I are saying we do not care or want to be bothered by the poor, the sick, the dying, the unemployed or just plain downtrodden.
If you think people like to be on welfare or live off handouts, think again. Nobody does. While Altucher does not express it this way, this is modern slavery. Being an employee is not a bad thing. It can give meaning to your mission or station in life. You first need to know what that happens to be.
Our society has been conditioned to a certain way of life that puts governments — local, state, and federal — more and more in the driver’s seat of our lives. Americans made choices many decades ago during World War II for things such as government-run health care and other social programs. We continue to perpetuate government-run things through socialized medicine with more programs such as ObamaCare.
How do we turn this around? Do people want to? We are currently in the eye of a social hurricane trying to answer these questions. Unfortunately we have a political class that is generally tone deaf to this issues. Political myopia drives decision-making at just about every level of government. The Political Class is rhetoric rich, idea deficient. Even some of our politicians are becoming what Rush Limbaugh likes to call, Low Information Voters.
The good news is that there is a reawakening of sorts through entities such as the Tea Party and a revitalized libertarian and conservative movement. And there are many conservative Democrats that have just about had it with the liberalism of the Democratic Party and want nothing of it.
The choice is with you. You need to take a little more interest in who your electing to local, state, and federal government. And, don’t blame bureaucrats. They are just doing the job that the political class empowers them to do when they pass laws that require governments to do things you and I do not want them to do.
If you want change, stop electing statists and put folks in office, true public servants, who care about more than the next election.
Need some help focusing? Look at your pay stubs for the last nine months. Add up the taxes that are taken out by your employer for the state and the federal governments. Imagine that money in you wallet or bank account. That should your better to re-focus and re-center on what is at stake.
Go to your next local Congressional town hall or local government meeting. Ask the politicians, what are you doing with my money? I can just about guarantee, they will not expect it. If they fail to answer in way you like, find his or her opponent and support them.