Over the weekend, I heard a great conversation about why the middle class, which is most of us, is shrinking instead of growing. It was a wide ranging discussion that covered everything from income inequality to the need to reduce the size of government, as well as federal taxes and over-regulations. Other conversation centered on the point that increasing taxes does not create jobs. When it was all said and done, the conclusion was that there’s a mistaken notion in this country that wealth redistribution through taxation will help move people into the middle class through a plethora of government programs that support everything from healthcare to education, including welfare, food stamps, housing subsidies, all the way to government funded job training. None of the foregoing programs address the central issue that was finally discussed, and that was the notion of personal responsibility verses government responsibility.
If anyone wonders why the middle class is shrinking in this country compared to countries where the middle class is expanding, just look at Canada. There, the middle class is growing because the government cut taxes. Because taxes are cut, employers have the cash to invest in expanding their businesses and that means adding jobs. Less regulation makes it possible, among other things, for new businesses to start. The real question, it seems to me, is who’s better at creating good jobs and helping people move into the middle class, the government or the people? Clearly, when people are left alone, they start companies and hire people. When regulations are reduced new companies are free to expand their markets, their products, and their workforce.
To suggest that government has grown too large might well be the most classic understatement of the year! Stop and think about how many ways the government intrudes into your daily life. Money is withheld from your weekly paycheck. The state and federal taxes you pay are used to help people pay for things individuals and communities used to provide themselves.