I have GOT to stay away from the echo chamber that is Facebook…

I just sat through a video – reposted by someone who is otherwise quite intelligent – that advocates the US adopt many of the same taxes as European and Scandinavian countries (the very countries that are currently seeing a mass exodus of wealth because of their tax policies)… And free healthcare. And legal limits to income.

And this guy just wants to balance the US budget.

There are several massive logical “disconnects” in this video. It completely ignores certain realities. It even completely ignores the entire underlying basis for the US to even exist…

Understand that I am 100% in favor of restructuring the US tax code, and doing so would solve a ton of our financial woes. Our tax code is unfair, plain and simple. A tax code shouldn’t be hundreds of thousands of pages long, and should be a single document, written in such a way that the average 12th-grader could understand it. That ain’t what we’ve got, boys and girls. Hundreds of volumes of legalese that would take an army of lawyers to decipher (and probably incorrectly), full of specific exemptions and exclusions that, frankly, shouldn’t exist. And we don’t elect people who give a rip about it, so they only add new volumes of exclusions and exemptions for their donors…

But to do it in the way this (I’m sure well-meaning, but certainly partially blind) person advocates is a recipe for disaster.

One of the biggest fallacies the left in particular loves to promote is “make corporations pay their fair share.” On the face of it, that sounds really good – I mean, why should corporations get any kind of a break?

What they don’t want you to realize is that corporations are all paper. They’re fake. Pretend. Not real. Legal fictions – necessary ones, to be sure, but fictions nonetheless. There isn’t a corporation, large or small, that generates wealth. Sure, the corporation can collect money (a LOT of money), but the corporation cannot generate money.

The corporation is only a funnel.

You know what a funnel is, right? One of these:

A funnel is a perfect representation of the cash flow of a corporation, and it’s upside down here to illustrate it. The narrow part is where the officers (and government) are, the wide part are the consumers/customers/clients; in other words, us. In between…

The corporation produces a product – any product, from computers to potatoes to aircraft to… You get the idea. The sale of the goods and/or services of the corporation to their customers provide the money to pay for the machines and rent and payroll and insurance (and dividends/repayments to loans and investors) and taxes the corporation has to pay – the costs of doing business. There is no generation of money above the wide mouth of the funnel. All of it – every penny – comes from the consumers of the goods/services the corporation provides. All of it.

That means that whenever the cost of doing business increases, the price of the goods/services must increase to make up for it – only the government can operate with a negative cash flow. It doesn’t matter what those costs are – new equipment, new facilities, interest on loans, increased insurance premiums, TAXES – those costs must be covered by the income from the sales of their goods and services, so when those costs go up, so do the prices of those goods and services.

So here in the real world, it’s the consumer that pays the corporation’s taxes, along with the rest of their costs of doing business.

Are corporate officers overpaid? Probably – but that’s not the issue they’re trying to hide (quite the contrary, in fact). The issue is that We, the People, foot the bill for those ever-increasing taxes, effectively taxing our income twice – sometimes three times.

But don’t let reality interfere with your rose-colored vision, Pollyanna.

Can it be fixed so it’s fair? Of course, but you won’t find any of our current politicians – or our echo-chamber media – interested in doing so. There’s too much money involved.

The other reality this guy utterly ignores is that we’re not the United States of Europe or Scandinavia or Australia. We’re different than any other country in the world. We were founded on principles that Europe has never had in its long and storied history. Principles that we have been abandoning right and left for the last decade and more…

And “Free” healthcare? No such thing. You think our taxes are bad now… But I’ve written on government-run healthcare before, a couple of times. Go back and read those, and get back to me when you take off the rose-colored blinders you’re wearing.