It's no secret I work in the automotive industry, and while I abhor cronyism and lobbying, successive governments have deepened the tax load on the industry so much that we're finding ourselves having to meet with government officials (both bureaucrats and politicians) in order to state our case and request they apply different rules to our sector like they do for hotels, airlines, construction and manufacturing. The list goes on.
So this got me to thinking. What comes first the taxes or the cronyism?
Actually, the exponential growth of government comes first. They keep getting bigger and bigger, requiring more tax dollars or borrowing that the easy targets for tax hikes like the auto industry (cars, gas, parts), the so called sin taxes (liquor and cigarettes) are raised until people are left with only a few choices.
- Sidle up to the government,
- Cheat,
- Alter the way you do business, or
- Close down
Well so many people, employers and employees alike, depend on businesses closing down is always a last resort, and different people respond in different ways.
But we must not forget that it is also in governments best interest that businesses survive and pay taxes.
It now seems we've come to the place where many employer and employee groups are sidling up the government to find a way of reducing their tax burden.
So far a few of the most favoured businesses have been cut a deal.
Will enough people call the government on this that they begin the process of honestly reforming itself or will they say damn the torpedoes and forge ahead with VAT and other tax increases (business license taxes, income tax)?
If the government maintains its present course, how will individuals and businesses respond?
Fasten your seatbelts for more cronyism in the near term and serious fiscal problems if they do not get their house in order.
For more on this discussion visit FEE.org here…
The following video from Economic Freedom, in the above link to FEE.org, that I stumbled on, although based on the United States tax policies, is very instructive.
