It’s time to heed an age-old warning. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy.
It’s unclear who first spoke these wise words. Some attribute them to French-born writer Alexis de Tocqueville. Others cite British writer Alexander Fraser Tytler. Or it may have been an unheralded op-ed writer in the Midwest. The origin doesn’t matter. It’s the insight that counts. When people can vote themselves something for nothing, they will, and they’ll keep squeezing the rich until they have nothing left to give.
Governments have always used higher tax rates to discourage certain behaviors. A recent example is tobacco taxes, which often double or triple the price of a package of cigarettes. Lawmakers don’t want people to smoke, but they don’t want to ban smoking outright. Instead they just keep dialing up the taxes, and fewer people light up.
But the government doesn’t want to discourage economic success. Politicians on both sides of the aisle speak every day about creating jobs and growing our economy. So why do they also implement policies that punish success by over-taxing “the rich”? We’d better figure that out -- and stop it -- before we kill the goose that lays the golden eggs.