A Tragedy for the Louisiana Economy

Income taxes are the most destructive taxes. Photo courtesy of Chris Potter via Flickr.

As United Statesians submit their income taxes today, Forbes reports that the Governor of Louisiana, Bobby Jindal, is surrendering the struggle to phase out the income tax in his state, a dismaying development because the nearby southeast states of Texas, Florida, and Tennessee impose no income tax and the economies of these states are booming. The Marxists of the People’s Party who struggled for 20 years to add the graduated income tax to the Constitution, implementing the Second Plank of the Communist Manifesto, would be proud of their successors. As the protest demonstration below shows, United Statesians enthusiastically promote big government.

United Statesians love big government so much that they protest for higher taxes. Photo courtesy of Martha Soukup via Flickr.

Louisiana refused to repeal the state income tax because it requires replacement by a sharp increase in a regressive sales tax paid disproportionately by the poor. The regression could have been easily eliminated by providing exemptions for necessities like clothing, grocery food, and medicine, as in states like New Jersey and Massachusetts. Sales taxes are paid only by rich people who buy luxuries; income taxes are involuntary punishment imposed on people who work and invest.

Taxes are a form of social engineering because a taxed good or service is produced in reduced quantities. The best taxes are sin taxes on alcohol, tobacco, sugar, and pollution as long as the tax rate is not high enough to encourage evasion. The income tax is difficult and vexatious to calculate, rewarding parasites that refuse to work and dishonest people who report false expenses and omit income. Who does the income tax punish? Investors and honest people who work hard.

Office suppliers love income taxes because it increases demand for their products. Photo courtesy of Liz West via Flickr.

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