Why Higher Taxes Will Destroy Our Economy

For any product that you sell, there is a pricing strategy involved in which you raise the price to a certain point. The place where you want to stop increasing the price is the point at which it causes reduced sales volume to such an extent that it reduces profits. This is a basic economic principle.

The same principle can be applied to taxes. The government needs to collect a certain amount of taxes to provide the income necessary to build and maintain an infrastructure for businesses to function within. After a certain tax level, however, the amount of money taken out of the economy actually reduces the amount of tax revenue that can be generated.

This is the current state of things in our country. Our government entities (municipal, county, state and federal) long ago increased taxes to a point at which it became prohibitive for businesses to thrive and in effect caused a reduction in potential tax revenues, in effect cannibalizing the system.

What happens when individual states increase their taxes? A great exodus occurs like the one in my home town Buffalo-Niagara region to other states with more business-friendly tax structures. I am seeing a similar trend in California in the few years that I've lived here (My old roommate lost his job because the company moved to Nevada for its lower taxes).

What do you think happens when the federal government raises taxes in the same fashion? Our jobs get shipped overseas. Lower wages in third-world countries are partially to blame for this outsourcing trend, but the problem is exacerbated by the relatively high taxes and prohibitive regulatory framework that companies and workers encounter in the United States.

In a short while, our Senators and Representatives are going to attempt to once again increase taxes. This will do nothing but worsen economic conditions with a return to the downward spiral that started in 2008. This is exactly what happened at the beginning of the Great Depression. Let's not let history repeat itself. We, as the people of the United States of America, need to create such an uproar against increasing taxes that our Representatives and Senators have no choice but to reverse this trend. We actually need to cut taxes to stop the cannibalization of our economy by its government.