Saturday, October 24, 2015

Economic Common Sense

The fundamental purpose of business is profit. If you believe anything else, you have never been in business or seriously considered how businesses operate. To stay in business, you must be competitive with other businesses that sell the same or similar products.

There are a few people that seem to believe businesses are started to create jobs. The fact is, that only happens with government jobs. Since profit is not a motivational factor for government they do not care what the labor costs are, because they do not spend their own money – they spend our money.

Production costs include equipment to operate the business, raw materials to create the products and labor to use the equipment that turns the raw material into finished products. When you sell the products the government collects taxes based on the amount of money you make selling your products.

Anything that a business has to pay out reduces profits and makes going into business less attractive. Large corporations like to keep the costs as low as possible to maximize profits. Raising corporate taxes causes businesses to move their production to lower taxed locations. Right now the United States has the highest corporate taxes in the world, so businesses are taking their money and production facilities to countries that are more favorable tax wise. Unfortunately when businesses leave they take their jobs with them.

Small businesses usually pay personal income tax rather than corporate tax. Individuals are normally not mobile because of family relationships, cultural considerations and social ties to where they reside, so when taxes get too high they just close the door on their business and the people they employed are now without jobs.

That is the atmosphere businesses have been struggling in since Obama was first elected and Harry Reid and Nancy Pelosi passed Obama’s first budget. Big business left or reduced operations here and moved to other countries. Small businesses just did not start or closed down, waiting for a more encouraging tax policy.

Now more people are on unemployment, welfare and forced into retirement than any other time in our history. Obama also opened the borders to allow many other people to come in and share the scarce government benefits available. Throw in Obamacare which moved millions of people from full time to part time employment and what do we have left? A dangerous situation, Mr. Magoo.

Our country now goes $500,000,000,000 more into debt each year and Congress is being asked to raise the spending cap, because our debt is going to exceed the $18.1 trillion spending allowed. Even with record tax revenue, we do not have enough people working to keep the government operating in the black.

The Democrat presidential candidates are trying to see who can give away more free stuff to the most people, using our money to buy votes for themselves. They like high taxes and use it as punishment against people who are successful. They chastise businesses for leaving and call them unpatriotic, while their own policies are driving businesses away.

Republicans want to reduce government spending, lower taxes and bring companies and jobs back to this country. This will increase employment, increase tax revenue and lower the cost of government and get people off of welfare and back to being productive citizens again.

You can like Democrats and vote for them for a number of reasons. Economics cannot possibly be one of those reasons. I do not understand how anyone that has common sense could cast a vote wanting more failed Democrat economic policies. People need to be self-sufficient and that requires a job. Americans in the United States want their pride back.

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