Minimum wages kill jobs, increase costs and send money overseas

workers-wages-vsA portion of President Barack Obama’s State of the Union speech discussed the creation of an economic climate that encourages businesses to open up shop in the United States and invest earned capital locally rather than overseas.  The president then addressed several policies that would accomplish precisely the opposite.

Obama proposed raising the federal minimum wage from $7.25 to $9.00 an hour, arguing that it would raise the incomes of millions of families. “It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets,” he said.

The problem?  It’s a lie.  Entry level economics courses teach the true effect of minimum wages.  Minimum wage jobs are filled by low skilled labor, many of whom are in high school and college and learning the skills necessary to succeed in the United States…skills such as working with others, taking direction from managers, being responsible with your authority and privileges.  Minimum wage jobs are teaching jobs.  When governments raise the minimum wage, businesses respond by slashing opportunities to these jobs, or increasing the price on products and services – or both.

What incentive do businesses have paying unskilled laborers more money?  I was asked a question recently: “How do you expect a person to make a living off of minimum wage?”  My answer is simple: I don’t.  Low skill jobs are not designed to support entire families.  Ask yourself a simple question – why would somebody work 60-hour weeks at a high-skilled professional job to support his or her family, when they could serve up burritos at the local Taco Bell and still support their family?  This is not realistic, and the world does not – and cannot – work this way.  There is a reason why people obtain the skills to get better jobs.  This is what makes career progression even possible.  It is why your local grocery store is clean and stocked with food, and why you are probably reading this article from the comfort of your home or building.

The net result in rising minimum wages is fewer jobs and an increase in prices for all of us.  How does this help the economy?  How does this help the very people whom our president claims to care about?  It doesn’t.  In fact, Obama’s policies demonstrably hurt the lower and middle classes by once again putting the burden of federal regulation on them.

To incentivize business, government needs to create a climate where businesses can operate without the fear of countless punitive regulations.  To encourage businesses to stay here in the United States, cut the corporate income tax rate.  Cut the personal income tax rate and cap it below 20%.  Remove the minimum wage, which is far beyond the scope of the federal government, and let states decide what is in the best interest of their residents and businesses.

More business-friendly states will, naturally, see more business – and less business-friendly states will be forced to change.  The free market is a powerful thing.  It works.  Americans see it work all the time in their local communities.  So much of what Americans spend their money on comes at the discretion of the free market.  It is enabled by a company’s ability to develop products and services that the people want and make money while doing so.  The free market builds economies, not the government.

While our government continues to willfully ignore even the most basic economic principles of incentivizing business, low and middle class Americans will be forced to continue shouldering the burden of its incompetence.

Arkansas residents fight back over martial law threat

BCM Carry Handle AR-15-3Citing concerns over an increase in violence, Mike Gaskill, the mayor of Paragould Arkansas, told residents to expect police armed with AR-15 semi-automatic rifles to stop everyone they see on the streets to demand identification.  Guilty until proven innocent, Gaskill implied it is the job of the residents to prove they are doing nothing wrong.

“I’ve got statistical reasons that say I’ve got a lot of crime right now, which gives me probable cause to ask what you’re doing out,” Gaskill told a group of residents at a town hall meeting to announce the plan.  “Then when I add that people are scared…then that gives us even more [reason] to ask why are you here and what are you doing in this area.”

“They may not be doing anything but walking their dog,” he said. “But they’re going to have to prove it.”

Following the frightening proclamation from the town’s mayor, two subsequent town hall meetings have been canceled due to “public safety concerns”, and to this point, no AR-15-armed police officers have been sighted on the streets harassing the town’s people.

Gov’t to spend $25m installing useless seatbelts in buses

SchoolBus_c3Despite convincing evidence that seat belts provide no additional safety for passengers riding on school and commercial buses, the National Highway Traffic Safety Administration will push forward a plan to require all new buses to come equipped with seat belts.

The plan will cost an additional $25m annually.  The NHTSA says the plan may save up to 8 lives a year.

Ironically, the government’s own safety regulators had nixed similar plans in the passed due to overwhelming evidence that seat belts provide very little benefit to passengers of buses, which are already built under strict safety standards.  More ironically, the NHTSA also refuted assumptions that seat belts improve safety just a short time ago.  They argued that there is no guarantee that passengers will use the seat belts, and improper use of the belts may increase the risk of injuries.  Further, more children get killed around school buses than in them, according to the NHTSA, and there is concern that some kids may use belts as weapons to choke other passengers.

Despite the NHTSA’s own findings, the government is moving forward with additional seat belt regulations.  The new law will not require current commercial buses to install seat belts, only new buses.  Buses equipped with seat belts typically run an additional $13,000 a piece.  Many fear poorer school districts will avoid buying newer buses and instead stick with older models, which may be more dangerous due to their age and mechanical wear.

The government seems steadfastly focused on spending money and implementing piles of legislation, each year, that amount to very little benefit, if any.  Useless seat belt regulations are another example of the government practically falling over itself, even after its own transportation safety board recommended otherwise, to waste taxpayer money.

Dear voter: You are being scammed, conned and deceived

dyc-tax-protest-7_359154aIn a recent letter to the American people, the Libertarian Party wrote that the voting population in this country are being raked over the coals, drained of their hard-earned money and systematically dumbed down through big government political initiatives disguised as genuine assistance.

“By blending tax hikes with (alleged) government spending cuts, they try to convince you that they’re all part of one scary package. That both things are bad,” Libertarian Chair Geoffrey J. Neale wrote.  “To add injury to insult, their phony “fiscal cliff” doesn’t include a dime of actual government spending cuts. Just pretend reductions in future spending.”

Tax increases alone should raise awareness from the American people.  “On New Year’s Day, what did Big Government politicians actually vote for?  They voted to rip you off an average of $800 a year MORE — a 2 percent increase in your Social Security payroll tax. While they bragged that they were doing you a favor.  They raised a pile of other taxes as well, including taxes on estates, higher incomes, investment income, health care, and businesses.”

The letter cites new tax increases will amount to over $600 billion in new government revenue while doing little to curb spending and enact meaningful reform to account for our nation’s unemployment problem.

Read the entire letter:

Taxpayers forced to pay over $500 million for abortions

According to a report published by the Susan B. Anthony foundation, public records show that the Planned Parenthood organization performed a record 333,964 abortions in 2011 and received a whopping $542 million in taxpayer funding, which includes grants and Medicaid reimbursements.

Women should be allowed to run their lives as they see fit, but taxpayers should not be forced to fund the act of killing unborn babies.  Over a three year period, Planned Parenthood has performed almost a million abortions, largely financed by the American taxpayer.  Although Planned Parenthood claims to offer a wide range of pregnancy “services”, abortions account for 92% of its daily operations, the report cited.

Worse, Planned Parenthood has reported almost $90 million in excess revenue and over a billion in net assets.  The abortion business sure is lucrative.

Why, then, are Americans forced to pay for abortions?  Regardless of profit or loss, funneling tax dollars to abortion clinics amounts to an abomination of freedom and an entirely unjustified use of tax revenue.  Raise your hand if you believe our brave patriots of yesteryear fought for independence 237 years ago so our government can spend hundreds of millions of dollars funding abortions.

My hand is not raised.


2012 brings big debt and fewer liberties to Americans

rules_1668_1668The year 2012 saw tremendous encroachments into the freedoms and liberties of the American people, and few of our Congressional representatives stood in the way of such abuses of power.  From taxing internet purchases to allowing the government to throw people in jail based on “secret” evidence of terrorism, this year marks another elimination of freedoms and liberties in the United States.

A couple things did increase, though: our national debt and the number of well-paid federal government workers.

The NDAA (National Defense Authorization Act) not only gave the government the authority to continue expensive and never-ending wars overseas, but it also gives Washington far reaching powers to imprison American citizens for the mere suspicion of terrorism.

“This bill takes away [the right to a trial] and says that if someone thinks you’re dangerous, we will hold you without a trial. It’s an abomination,” remarked Kentucky Senator Rand Paul who argued fiercely against the inclusion of the indefinite detention provision within the NDAA.  Paul cited Japanese internment camps as historical evidence that government cannot be trusted with powers that rely on behind-closed-doors “secret” evidence against the American people.

The United States’ punitive system of taxation is forcing companies to funnel millions of dollars to overseas bank accounts.  Facebook, in fact, has funneled nearly a half billion to Cayman Island banks.  The U.S. government’s continued insistence to punish success in the United States has once again prompted companies in 2012 to take their financial business elsewhere.

At the state level, an estimated 225,000 wealthy residents have fled California to escape its tax structure.  This year, Democratic Gov. Jerry Brown successfully pushed through tax increases that make Californians the highest taxed citizens in the country as the state’s deficits skyrocket to nearly $30 billion.  Taxing the rich never works, and as reported on the Small Government Times before, ends up sending your wealthier taxpayers running for the hills.

How about that U.S. Postal Service?  This year marked the first year that the government distribution service defaulted as the organization continues to leak money.  Daily, the Postal Service is losing about $25 million.  The financial hemorrhaging is preventing the service from paying current and future retiree benefits, roughly $5.5 billion in 2011 and 2012.

The number of federal workers, along with their salaries, have seen dramatic increases in the last several years.  According to public record, over 500,000 federal government workers earn more than $100,000 a year (an increase of 10% since 2006) and average nearly twice the private sector in annual salaries.  In fact, 77,000 federal workers make more than state governors.  Despite economic uncertainty for the majority of the American people, more than half of those in Congress are millionaires.  Several calculate their wealth easily in the hundreds of millions.

More than 40,000 state laws took effect this year, ranging from a higher minimum wage for several states, fining bus and truck drivers for talking on their cell phones while driving and a variety of regulations on concussions suffered while playing sports.  Some states made it a requirement that larger businesses use the E-Verify system to confirm the legality of its workers.  California gave illegals brought to the United States as infants access to the same statewide scholarships that legal students enjoy.  Other states are requiring school and city coaches to bench younger players when they are believed to have suffered a concussion.  Seat belts laws, inclusion of gay and lesbian studies in school curriculum and requiring state licensing to perform abortions all helped to increase the number of laws and regulations offered in this country.

The U.S.’s national debt has skyrocketed passed $16 trillion, an increase of a whopping $5 trillion since Barack Obama took office.

Elections have consequences, ladies and gentlemen.  Stay vigilant.

A nation of taxation: How to socially engineer a population

When you think about taxation in the United States of America, you typically will think about the government taking money from its citizens to fund expenses that the government incurs. Nowadays, we argue a lot about how much we are taxes and in what ways government taxes us — but have you considered the question of why we are taxed?

Even’s definition of a ‘tax’ adheres to the common denotation of fund raising:

Tax: a sum of money demanded by a government for its support or for specific facilities or services, levied upon incomes, property, sales, etc.

But the truth is that not all taxes are levied on the citizenry for the purposes of raising funds to pay for its expenses. In fact, many taxes are designed to, in some fashion, modify the collective behavior of the citizens.

These are typically ‘excise’ taxes, and their cost is hidden from the end consumer at the time of purchase. A common excise tax we routinely pay is in gasoline; the federal tax currently is 18.4 cents per gallon, and states will attach their own taxes on top of it (i.e.: New York’s is 51.3 cents per gallon). You don’t know it’s there, but next time you think gas is expensive at the pump — just remember that up to 70 cents of that is in taxes alone, and your gas could be $2.30 a gallon instead of $3+. But, there’s a more sinister question at hand: why is gas taxed? You already pay income tax, sales tax, property tax, etc. as previously discussed in the first part of this taxation series. Do we really need to raise more money?

The answer is, unsurprisingly, no. In fact, in 2010 the federal fuel excise tax amounted to $38 billion dollars — hardly a drop in the bucket given our trillion dollar budget. The original intent of this tax was to have people who drive more pay more for road maintenance and those who didn’t drive as much/drive lighter vehicles paid less. This tax is to modify behavior by encouraging you through financial penalty to drive more fuel efficient vehicles and/or drive less. By raising the cost of driving, the government is incentivizing you to modify your behavior by artificially inflating the true cost.

It doesn’t just stop at gasoline, either. There’s an alcohol and tobacco excise tax that you pay that’s hidden into the cost of those products – upwards of a dollar for a single pack of cigarettes at the federal level and usually more at the state. This is to discourage people from using alcohol and tobacco for ‘the greater good’ of society. This is an example of when the government attempts to play parent and deprive individuals of their cognitive liberty. The government is altering the conditions of common situations because it believes it is smarter than you and knows how you should live your life.

Taxes, by in large, aren’t always about the amount the money, but government sure will use the concept of money against you. Just as you are penalized for the actions the government doesn’t want you to take, it subsidizes you through tax breaks and credits in order to encourage you to do something.  The income tax code encourages people to get married by taxing you less, it encourages you to buy a house (tax free mortgage interest), it gives you credits for going to school (college tax breaks), and it even gives credits for buying hybrid cars that would otherwise be an unwise economic choice. These taxation policies, while seemingly innocuous, are designed to strip away decision-making capabilities and substitute the government’s judgement for your own — and they do it using other people’s money, to boot.

Anything you do with taxes, other than to raise funds, is a corruption of taxation and a gross abuse of freedom. Without your financial liberty, your freedom of speech is greatly hampered, and by making it so the people are dependent on these credits and to avoid penalties, you will behave the way the government wants you to behave in order to maintain your standard of living. These actions taken against the single individual might not seem like much, but when considered at the aggregate scale of the entire population of the  United States, they make tremendous impacts on our society.

How can you truly claim to be free when so many Americans are unaware of how the everyday choices they make (spending hard earned money) are being manipulated by the tax code? And it doesn’t just stop with you, the citizen; the government also subsidizes industries (farming) and penalizes others (tobacco) so you are never truly sure of anything.

cigarettes.  Cost of a bad habit.

If you needed further proof that our taxes have gone completely insane, you need look no further than the soft drink tax/bans. The government taxes you to raise money to subsidize corn farming dramatically, which leads to the cheap production of high-fructose corn syrup as a low-cost replacement for sugar in soft drinks — now, the government is attempting to enact taxes and bans ( on the very drinks it is already taxing you on to produce cheaply.  That is right, the government is taxing you in order to tax you again.  All this to ‘improve health’ and ‘deter soft drink habits’.

What more can be said about a tax code designed to modify the behavior of the population? This corruption of taxation has occurred, and worsened, with both Democrats and Republicans in full control of the congress and presidency.

There is no ‘lesser’ evil.