Big Government Means Bigger Business

Newsflash: The rich are already rich. Higher tax rates don't prevent them from being or becoming rich. The wealthy are less concerned with higher tax rates because they will avoid taxation by shuffling their wealth around and by collaborating with government to ensure their position. Higher tax rates will not prevent GE and the Hollywood effete from acquiring wealth – they have already ascended. Large corporations are natural allies of heavy handed fiscal policy because they are better positioned to influence government in their favor and better able to reposition themselves financially and globally in order to skirt or avoid taxation. Big business is the natural ally of big government.

Tax rates do, however, have a mitigative effect on those moving through the economic continuum. In free societies people are not restricted to the class into which they are born. Unlike most economic systems throughout the world, capitalism allows for infinite mobility through the economic spectrum. But onerous tax regimes – and worst yet, being told that the system is rigged against you – can have profound and devastating effects on those trying to climb the economic ladder.

One of the better aspects of the 'creative destruction' of capitalism is the possibility of unseating the power structure. If the influence and control by the government is relatively weak then there is less ability for a group that has the policing power of the state to influence, collude and control. At the very least, corporations can be toppled by the next guy with a better mouse trap. Simply put, if WalMart is functioning in ways that offend your sensibilities, you can spend your dollar elsewhere. If government is doing a poor job, good luck trying to change that.

When a controlling bureaucratic labyrinth exists, the rich and powerful will seek to impose their will with the force of law. The small guy doesn't have the same ability to influence the heavy hand of government as the wealthy. Sure the little guy gets one vote. But the wealthy get that same vote plus a lobbyist. This is the impetus that motivates those with the notion of smaller government. It is mystifying that so many vote for larger government to control the economic and social reigns while thinking it will lessen the influence peddling.

Ironically, those who seek to lessen the shipping of jobs overseas, the consolidation of power and wealth into the hands of a few and reign in corporate behavior with taxation, caps, restrictions and regulation often make the problem worse. One must be careful when ceding power to the government or imposing one's will via government mandate to not just intend to do good.