Is Taxation a Process for Redistribution of Wealth?

David V MacCollum

By David V MacCollum

My article on January 9, 2017 in the Arizona Daily Independent on “When are the tax laws going to be fixed?” raised an important and revealing question – do we raise sufficient taxes to pay for expenses incurred by our government or do we limit the expenses incurred by our government that prevents wealth redistribution?  In this article, the key issue was – why is business taxed?  Enterprise, based on a single entrepreneur, partnership or a corporate identity is not a person and should not be taxed.

Enterprise is the goose that lays the golden egg of wealth creation. Eventually, this wealth goes to people who are owners, stockholders, investors and/or most importantly, the employees who make the enterprise succeed.

The role of the federal government is only to provide what the local community cannot provide. There are three issues that should be the limit of federal funding.  First, is an economic climate that fosters programs to create enterprise wealth.  Second, is the rule of law that ensures for justice for all citizens.  Third, is the defense of the nation.  With no taxes on enterprise, the economy thrives.

The rule of law ensures for protecting the rights of ownership for every citizen. The funding of the military establishment supports the need to provide for peace that ensures for and respects fair trade internationally.  Taxation is only for real people who are citizens in a nation without illegal residents. A justice system reduces the need to regulate enterprise with a rule-making process. The funding of a military reduces the need for foreign entanglements and costly treaties in order to avoid war.

Unfortunately, government grows big by requiring unreasonable taxes and debt to support local control with grants and intervention. It makes no sense to have costly taxation to engage in redistribution of the nation’s wealth. This process of taxation only robs the local community of funds for doing what is best for themselves.  Big and costly government imposes a federal middleman management who has no understanding of local needs. Out of frustration, the people engage in protests that are nothing more than mob rule. The entire process of taxation for big government creates chaos of third-party rule. Overlooked is that without business taxation and lower personal income taxes, many enterprise are attracted to our nation, thus creating increased national wealth.

It soon becomes a myth that big government is there to help, as taxation becomes the basis of a power grab. The ultimate is the proposal that everyone should receive a living wage through a check from the government. This concept robs every person of initiative to take care of themselves.

What does a limited taxation do that only ensures for the economy, justice and defense? It provides a gold rush of enterprise that wants to do business in our country. With this influx, there becomes the need for many niche services to support new enterprise. This can be termed as low-hanging fruit that provides the opportunity for new business to be established that produces high income and have the benefits of wealth.

Additionally, the current difficulty in establishing a universal health care for all our citizens could be easily solved by government funding only the catastrophic and pre-existing medical costs. This would create a competitive climate for health insurance and promote citizen purchase of medical insurance. To rid our nation of a failing infrastructure and eliminate a 20 trillion dollar debt, an additional value tax on all products except medical costs, new housing, food and exports would bring the wealth of free enterprise to all citizens.  Reduction of public debt is an elimination of another form of taxation.

A tax-free business economy gives government back to our citizens. Government services have a choice to allow transition to private enterprise or ensure for their balanced budget that is funded by service fees, not taxes.

The question, “is taxation a process for redistribution of wealth?” provides a broad brush on a concept of how our nation can restore its wealth. To make America great again, requires Congress to embrace some bold economic approaches to existing programs such as social security and retirement programs, which were funded by employees and should be honored and not destroyed.

At the time of our American Revolution, Adam Smith of Scotland presented a theory about the wealth of nations. Wealth is not evil, as it should be shared by all citizens of our great nation. For tax reform, we need to be bold and eliminate taxes on enterprise and prevent the current process of wealth redistribution.