China Better on Taxes than Democrats?


By: Warner Todd Huston

From CNN:

China slaps a tax on chopsticks

Charges on goods unveiled in bid to preserve environment

Plans to impose a 5 percent consumption tax on both disposable wooden chopsticks and wooden floor panels would help curb the plundering of timber resources and efforts to protect the environment, the Ministry of Finance said.

Much as I am loath to give an “attaboy” to the Chinese, they have at least realized what a tax does and it is a lesson that the Democratic Party should learn.

When one goes to a restaurant in China one encounters (or used to encounter before this taxation plan, anyway) a container with disposable wooden chopsticks wrapped in paper wrapping at each table. There one may take them as needed and then throw them away afterward.

The Chinese government says that over one billion (yes with a “b”) pairs of these disposable sticks are thrown away every year and that is a LOT of wasted wood. It is waste that the Ministry of Finance is looking to curb. So, they have decided to tax these disposable chopsticks in hopes that the waste can be made less.

See, they expect frugal Chinese citizens to begin to bring their own, non-disposable, chopsticks from home to eat with instead of wastefully throwing away the disposable ones. And the Ministry of Finance expects this tax to help encourage citizens to stop using them.

That’s right. The Chinese have realized that a tax is NOT merely a device to raise revenue but a way to retard the growth or usage of a thing! They expect this tax to STOP the usage of disposable chopsticks at least enough to slow the over usage of their timber resources.

Imagine that? A tax that stops usage of a thing.

So, if even the Chinese realize that taxes slows growth and ends to eliminate usage of the item taxed, why is it that the Democratic Party cannot seem to grasp this simple concept?

Where the Chinese see taxes as a preventative to growth, the Democrats seem to imagine that taxes are not consequential to the consumer. That an item will not be affected by taxes in any way. That, regardless of the tax, consumers will pay up regardless.

The various and multitudinous taxes on cigarettes from state to state is a perfect example o disprove the Democrat’s notions. When one state taxes cigarettes to a higher degree than a neighboring state, citizens of the higher taxed state cross state lines to buy their cigarettes at lower prices. Hence, fewer cigarettes are purchased in the state where the taxes are higher. Ipso facto, the tax prevents consumers from buying that item where the tax is high.

In fact, I’d reckon that one aspect of the constantly falling levels of cigarette smoking is a direct result of the ever-skyrocketing taxes. In some states the taxes are higher than the actual cost of the product at this point.

Conservatives have always believed that high taxes destroys growth and they have been proven right by every administration with the good sense to lower the tax rate. We see government coffers filled nearly to overflowing every time taxes are cut just as we see a corresponding fall in that level of government accounts when taxes are raised. JFK proved it, Reagan proved it and so has George W. Bush (and they are the only presidents who have proved it).

So, though it is sad to say it, the Chinese are smarter than the Democrats.

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