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Name: Sgt.Stryker
Location: Lexington, KY
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Kentuckyfornia?

KY tax-revenue
 
 
 
 
 
Although my home state of Kentucky doesn't boast an economy the size of California's (8th largest in the world), our budget shortfall is looking just as problematic.
"State revenue plunged 12.1 percent last month compared with April 2008" according to the Louisville Courier-Journal. There are a few bigger issues at play here.
 
First and foremost, I was pleased with Republican Senate President David Williams' response to  remarks by Governor Steve Beshear that all options were on the table to close the shortfall. "We've given this governor as much money as he's going to get."
 
Just as compelling were Democratic House Speaker Greg Stumbo's remarks-"Now is not the time to raise taxes on Kentucky families. There are other ways to raise revenue." Surprising, coming from a Dem.
 
Also interesting to note is the 36% drop in Corporate Income Tax in the table above. I would be curious to know how many businesses have moved out of the state due to the tax rate.
 
But what I found most interesting was this little tidbit-"Eric Gregory, president of the Kentucky Distillers Association, said a 58 percent decline in revenue from the wholesale tax on liquor in April reflected an "alarming" drop in sales as a result of the tax increase."  The increased tax was passed earlier this year on alcohol and cigarettes, and looks to be backfiring already. I've heard anecdotal evidence that cigarette sales are already down over 3%. Local news mentioned that lawmakers were "surprised at the drop in revenue." No kidding.  
 
And there, my friends, is today's object lesson. When taxes are raised to increase revenue without cutting spending, people will opt out at every possible opportunity.
 
I pray that the legislators in every other state in the Union take a long, hard look at what has happened to California.
 
"Everyone wants to live at the expense of the state. They forget that the state lives at the expense of everyone"  Frederic Bastiat
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Breaking The Law

Not long ago, I read a fascinating bit about Frederic Bastiat's Parable Of The Broken Window. It was used to explain why increased government spending was a bad thing and why the stimulus would not work, due to adverse unintended consequences. While an examination of the parable may be a worthwhile debate on TH, my purpose here is to discuss something even more intrinsic to our current economic situation.
 
Bastiat, for those who aren't familiar with his work, was a brilliant 19th century French economist and political philosopher. Ultimately, his work focused heavily on the benefits of capitalism and the deleterious effects of statism. After reading about the Parable of the Broken Window, I was intrigued to the point of searching out his works, at first in local book stores and libraries (I'm still old-school like that), but those attempts were fruitless. I ended up getting on Amazon and securing a few of Bastiat's books, as well as some Friederich Hayek and Milton Friedman. In retrospect, I wonder why none of these fabulously talented economists were taught in my university Econ classes (oh, yeah, state school...never mind). Keynes certainly was...but I digress. I can't wait to read all of these works, and a more in-depth post will certainly follow. In the meantime...
 
The first book I received was Bastiat's "The Law", an 80 page treatise which sought to define concepts such as "justice", "the law", and "plunder". Now, while I don't want to do a book review/report per se, I do think it is instructive to examine some of Bastiat's writings on these subjects, as they relate directly to our current plight.
 
First and foremost is the concept of "law".  Bastiat says it is "the collective organization of the individual right to lawful defence." (4) He goes on to state that the law has been perverted by some in government and society, to the point that they have "converted plunder into a right, that it may protect it, and lawful defence into a crime, that it may punish it." (7) Furthermore, this perversion has occurred "through the influence of two very different causes-bare egotism and false philanthropy." (8)  The origin of property and man's tendency towards acquiring it comes "from a perpetual application of his faculties to objects, or from labour." More importantly, the origin of plunder comes from someone "seizing and appropriating the productions of the faculties of his fellow-men." (9) Ultimately, "Law is Justice." (72)
 
Follow along with me, now...
 
We elect politicians to create and enforce laws, and we expect these laws to protect us from plunder while allowing us to operate freely in pursuit of our aspirations. However, egotists and false philanthropists in politics believe that they are the sole arbiters of who benefits from their decided application of the law. They believe that "mankind itself tends towards degradation, and is only arrested in its tendency by the mysterious hand of the legislator." (36)  They also believe that mankind need only be passive, and this unseen hand of the law, "moves, animates, enriches, and regenerates mankind." (37)  Under state control and  state planning, one can never escape the influence, and therefore, the plunder, of the state. But, in a just and free society, one can always choose to participate to any degree they desire in a free market...this notion is fundamental to the whole equation. The law, when wielded by statists, compels people to act against their natural condition, one of free will and liberty.
 
While all of these ideas have already been explored by any number of political philosophers, including the Founding Fathers, this examination causes me to wonder...do statists ultimately believe that they'll never run out of people to tax? Surely they must know that in guaranteeing their potential voting bloc by making everyone "equal" in their dependence on the government, which is inevitable if you destroy people's ability to exercise their free will, they are ultimately forcing the demise of the society as a whole. Diminishing legitimate choices and enforcing plunder can only be viewed as a diminishment of our liberty, and by extension, our natural state. Capitalism and the free market are inextricably linked to this natural state of choice and freedom. Any effort to impede these endeavors must be resisted. 
 
History teaches us that the tyranny of plunder can and does occur. FDR with his 100% tax on earnings over $25,000 (some New Deal), Chavez in Venezuela today, nationalizing industries and resources,  the U.S.S.R. with it's Central Planning, Zimbabwe's failed economy...the list is rife with failed socialist/Marxist/statist governments. They all have one thing in common-a government mandated plundering of private capital and wealth. Yet Obama and his minions are leading us straight down that road. And he's in a big hurry, since the current economic crisis is too good to waste.
 
And we're letting him.
 
Shame on us.
 
But, not all is doom and gloom. I believe that the majority of people in this country, when forced to make a choice, will come down on the right side; the side that doesn't accept socialized health care, or the confiscatory taxes needed to pay for it, or every other form of government plunder that is coming down the pike. The country is getting quite the indoctrination, and will be more educated about the vagaries of the march to statism. I believe we will take back the House in 2010, and the WH and possibly the Senate in 2012.
 
The over-reach from the left has been swift and extreme, and the moderates are moving towards buyer's remorse already. Obama's 60% approval rating has dropped to the mid 50's, and his disapproval rating is nearly up to 50%. (Rasmussen)  It will only get worse, don't worry about that. It always does...Carter certainly proved it. Dick Morris posited on Hannity last night that Obama's favorable rating would be down to 30% within the year.
 
If not, we have only ourselves to blame, because we didn't call the leftists exactly what they are: socialists, communists, Marxists, and statists. Bastiat knew what the potential for harm was over 150 years ago, and our Founding Fathers knew long before that. You can't fight a problem if you can't define it...we have met the enemy, and it is the law.
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