Every election, we are faced with an unprecedented amount of tax increase proposals on the ballot. 2016 is no exception to the amount of potential tax increases and new taxes that will stranglehold economic growth at that local, state, and national levels.
Colorado will be center stage as the nation watches for the results to determine whether the proposed Amendment 69 socialized health care proposal on the state ballot will be passed and take effect. Dubbed ColoradoCare by proponents, the proposal would make catapult Colorado to being the state with the highest income tax rate in the country. A 10 percent payroll tax would be instituted, with employers paying 6.67 percent and employees paying 3.33 percent, to ultimately fund the system. The ColoradoCare political subdivision from the state would also push a 10 percent increase on any non-payroll income. In effect, the proposal will restrict any tax alleviation and threaten personal income growth.
Nevertheless, proposals, like ColoradoCare’s calamitous tax increase, have made their way onto ballots across the United States. These proposals are not either being countered with aggressive or people don’t care about paying higher and higher taxes.
Cigarette taxes have seen an en masse resurgence this election cycle, as well. With many of these particular proposals having the intention to continue to reduce cigarette usage, they lack clarity, safeguards and come at one of the most arbitrary times. Even though cigarette usage is on decline nationwide in many age groups, especially in youth, proposals in states like Missouri, Colorado, and California are facades to garner more tax revenue.
Just like any tax that is used as a part of the regulator’s toolbox, cigarette taxes in our current high-taxed economic environment will not change the consumption habits of a pack-a-day smoker. Neither will such proposals adequately fund government programs including a state’s Medicaid program, or even cancer research effectively.
Other examples across the country of senseless tax increases can be seen on the West Coast with California’s Proposition 55 which expands the state’s Proposition 30 tax increases to individuals who earn at or above $250,000 in personal income. Also in Maine, voters will be asked whether to pass ballot Question 2 which will increase taxes on top income tax earners and small businesses by 3 percent, making it the 2nd highest top tax rate in U.S.
Regardless of what is being asked on the ballot in states across the country, the basic principle of higher taxes stifling growth needs to come to the forefront of any tax question. If there is a sudden increase in taxes for an industry, growth will be render inert, depending on severity and will threaten the market driven economy that allows our country to continue exist.
No one is willing to pay high taxes but people are willing to make them pay. Self-interested government is at its finest when advocacy is rooted to growing it. Ronald Reagan once said, “No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear.”