Tax Hikes Are Not "Investment"

I live in Michigan, a state in great economic trouble. Our state government is in a budget shortfall and instead of trimming the fat, our governor wants to raise taxes. But, she maintains, these taxes are really “investments.”

How will raising taxes help our ailing state? It won’t.

First, taxation is never investment. Period. Ever. “But aren’t taxes to build libraries and schools investments?” No. “What about roads… we need to pay to maintain our roads.” No. Taxes are taken from people by force, not consent. Most of us pay taxes because we don’t want to face consequences of disobedience. I obey and pay rather than throw my life away.

Investments, however, are something I make voluntarily. I choose to invest. I can choose to avoid investments. I control, at least to some degree, my investments and how they work for me.

Taxes are not investments.

Michigan, economically, looks like Rocky Balboa in one of those “Rocky” fight scenes where he gets beat up savagely by Apollo Creed, Clubber Lang or Ivan Drago. It isn’t a pretty picture. Raising taxes will only make the pounding worse.

Already businesses are experiencing trouble collecting from their customers. Raising taxes, and adding new taxes to our service industries, puts many financially-struggling companies in a terrible position. Now they will owe the state while still fighting to collect from customers. This is a terrible time to exacerbate cashflow problems.

When states add taxes, they must build their infrastructure to oversee the collection of these taxes. Now, in addition to a government that won’t cut, we see more layers will be required to collect these taxes.

Michigan businesses will need to pass the burden on to the consumer. Consumers are already hurting with taxation.

Tax hikes are not the answer.