Government can’t spend its way to prosperity

Published 7:44 am Thursday, December 3, 2009

We are in an era of criticism where the other party can do no right and where we have all the answers. However, there is a battle going on between two philosophies and we must come to something that is in the middle. I believe it’s called “compromise.”

The Democrats believe that government can solve all our problems where Republicans believe it’s up to the individual. Currently, the Democrats have control, and we see a big growth in government. If government gets bigger and bigger, what is going to be required? Of course, it will mean higher taxes and more socialism of our system. The decision is going to be up to you. Socialism or free enterprise or something in the middle?

Our current legislator, Rep. Robin Brown, is very interested in creating jobs in Minnesota, but does her voting record prove it? She voted for one of the largest tax increases in the state’s history that would have been a job killer and would have created higher unemployment and an incentive for businesses to move out of Minnesota. The tax bill also included language that would have eliminated the Job Opportunity Building Zones provisions, which has helped create jobs in Albert Lea. Minnesota is already the eighth highest in taxes in the nation and is No. 1 in the Midwest.

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Now, I know that the state government is running a deficit of several billion dollars and the easy way to try to cover this is to raise taxes, especially on small, privately owned businesses that operate as Subchapter S corporations. When you raise taxes on businesses, what actually happens? It sucks out the money they use to pay employees and to expand their business and quite often, even reduces the revenue the state actually receives. It really hurts communities like Albert Lea.

Brown also mentions that bonding can help create jobs. That is true, but it also puts the state further in debt. The history of bonding in Minnesota is that it has been kept at 3 percent of the annual budget. The Democrats now want to expand this to 5 percent. Bonds have to be paid off and that requires more taxes. Also, the jobs created by bonding usually are short-term. Bonding should be used, but should be used very carefully or it just puts us in a deeper hole.

Nowhere in her article in the Tribune on Nov. 17 did it mention anything about reducing costs and making government less expensive and less intrusive in our lives. I am sure that, if her family ran into financial hardship, she would reduce spending and possibly work a little harder to create revenue. That’s what most families would do and also what most businesses do — but not government. They believe they can spend their way to prosperity.

I believe in capitalism and the free enterprise system. Winston Churchill once said, “The inherent vice of capitalism is the unequal sharing of blessings; the inherent vice of socialism is the equal sharing of misery.”

Let’s stay away from socialism. Instead, let’s stimulate the economy and increase more jobs by encouraging businesses to locate and expand in Minnesota. Find ways for them to keep more of the money they make, so they will have assets to grow and to pay higher wages to their employees. Let’s encourage people to spend in Minnesota by giving tax credits on their income taxes, when spent on certain things that are produced or sold in this state. Let’s give tax credits to employers who hire employees and pay them more than $24,000 a year. The state can encourage employers with a tax credit when they pay higher wages to employees if they increase the payroll on current employees by at least 1 percent over the rate of inflation. Many things can be done that can provide incentives for a robust economy rather than penalize people for being successful.

I believe the state needs taxes, but they have to be very careful on how much they tax and how they spend those tax dollars. Will our current legislator do a good job in representing her district or will she continue to be trapped into continuing her belief that big government and high taxes are the way to prosperity?

Al Arends is a co-chairman of the Freeborn County Republican Party.