The Toxic Relationship Between Big Government and Big Business

Ronald Reagan
Ronald Reagan

It was Ronald Reagan who said that entrepreneurs and their small enterprises were responsible for nearly all economic growth in the United States. And he was right about this, because unlike their larger corporate counterparts, the small business by its very size has the most room plus incentive to grow and innovate.

America’s economy is based on commerce and has historically expanded on the creation of new goods and services for consumers. Those are more likely to be born from smaller enterprises and individual inventors than from a large company. When Steve Jobs and Steve Wozniak built the Apple I and helped pioneer the digital age, they were working out of their garage, not from a corporate office.

The same argument can be made about the inventors of the telephone, the television, the light bulb, and the automobile. And as new industries explode and grow, there are new jobs created by necessity rather than convenience.

Calvin Coolidge
Calvin Coolidge

In order to facilitate this growth, capital is required to invest. Under administrations that cut marginal tax rates; such as the administrations of Calvin Coolidge, John F. Kennedy, Ronald Reagan, George W. Bush, and now Donald Trump, being allowed to keep more money up front fast tracked economic growth and resulted in higher yields of revenue by the federal government due to more taxes being paid rather than higher taxes being paid.

This has been dubbed the Laffer Curve, due to the idea being brought to prominence by Arthur Laffer.

Often this is lambasted as “trickle-down economics” by critics, often Democrats who are either state-capitalists or syndicalists who want a more socialist system. They deride the philosophy insisting that the largest breaks are going to the wealthy, which is frankly not true at all.

Even under a flat tax code where everyone pays 10% of their earnings, the individual who makes one million dollars will pay $100,000.00 in taxes per capita. Meanwhile, the individual who makes one-hundred thousand will pay $10,000.00 per capita.

When you file your tax returns and have excess amounts paid in returned to you, the person who paid more per capita will receive more back per capita, based on the percentage that was paid in.

There rests the propaganda employed by the syndicalists who want to push America toward their Marxist fantasy. They use different terms with different meanings interchangeably to skew the narrative and make it sound like low tax codes hurt the little man.

They claim that the period of America’s greatest economic growth was when the top tax bracket was 90% without stating that tax deductions which had greater value than they had today gave taxpayers most of their money back. The standard deduction alone was equivalent in spending power to what $75,000 buys today. When they talk about what the minimum wage would be if it kept up with inflation, they are making the wrong point, and should be talking about what the deductions for everyone would be.

The likes of state-capitalism/cronyism and socialism draw closer logically to the narrative portrayal of trickle-down economics by the very nature of collecting high percentages of revenue and using it for subsidies and retirement funds.

What you pay into social security is definitely less than what you’ll be drawing back when you retire. If the dollar amount relieved from your paycheck was kept by you and placed in an interest-bearing savings account at your bank, you would not only keep the full amount, it would grow in value. And depending on your will, it will be passed to your children and grandchildren after you die.

The same logic applies to every government program. What you put in trickles back down on you while people who paid less or nothing get more than what was invested. It operates, as Marx put it, from each according to his ability to each according to his need.

But because the government views its own needs above all others, they always keep the largest share for themselves. It is an inherently corrupt fixture that serves the same role in a community that cancer serves in the human body.

State-Capitalists—the traditional standpoint of the Democratic Party and some who stand on the Republican side—is closely similar to Socialism as it pertains to taxation and the desire for a large centralized government to be in control of it all.

Technically, any measure of public influence on private citizens and their enterprises can be considered socialism, but in varying degrees. The truth of the term state-capitalism rests on the politician understanding that the business must flourish if he wants the government to get its cut.

That is why state-capitalists and socialists go hand-in-hand. Even Barack Obama who is often regarded as a Marxist and a Socialist by the left was nothing but a state-capitalist who used cronyism in his administration. His tax code allowed the largest corporations like Walmart and Amazon to thrive on tax dollars while paying as little in as humanly possible while their smaller counterparts and the individual American were crippled under the weight of it plus his regulations. It is why many manufacturing jobs were outsourced to Mexico and China.

If you’re wondering why Barack Obama’s GDP growth rarely passed 1%, there’s your answer.

Even the Affordable Care Act/Obamacare, POTUS 44’s legacy, was designed to give large health insurance companies guaranteed business without competition. If all had went according to plan, the entire market would have been consolidated under the largest companies like Aetna and Kaiser Permanente and nationalized by Hillary Clinton if she had become President.

The greatest economic growths happen when you empower the individual to innovate and become an entrepreneur. These are people are your friends and neighbors who are rooted in the community and have that interest in supporting it. The God-given inalienable rights of Life, Liberty, and the Pursuit of Happiness are the root of this.

While the larger company with a tax break might create a large amount of jobs in the short term, as soon as that incentive dries up and it becomes cheaper to do business elsewhere, they have nothing anchoring them down and laying everyone off when it’s convenient. But the government in this circumstance only cares that they can use these jobs as a handout and exploiting the tax code to stifle individual freedom.

Guest writer ~Ryan M. Farmer (Rising Sun)

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