What about Pennies?


Per Scriptum,

E. Wesley

According to an LSJ article posted this morning; “Drivers can afford gas tax increase.”  Kirk Steudle, Director of the State Department of Transportation, believes that a tax increase to save over 125 road projects only add up to 16 cents per motorist per week.  He likens the tax to “a stick of gum.”  His reasoning is that if individuals can afford to spend $2-$4 on a cup of coffee, why should they be concerned about 16 cents.  But is this really the time to increase any tax?  We’re in an economic crisis.  Every penny in the economy is a penny endowed to an individual for a purpose.  It represents the hard earned work of someone.  If we judge the power of a tax based on what we think is affordable for 1 human being, we miss the bigger picture.  As Larry Reed once said, “Sound policy requires that we consider long-run effects and all people, not simply short-run effects and a few people” (reference here).  I wonder how many businesses run entirely off of the “pennies” of others (e.g. the gum industry).  Any time we increase the overall share of the government over our pennies, we decrease the overall share of other industries by the same measure.  If “penny businesses” like gum start to go under due to “penny tax increases” in a time of crisis, what will that say about us?  Will that cause assurance or fear with regards to our economy?  If we can’t demonstrate responsibility with our pennies, how can we demonstrate responsibility with anything else?  The American economy was built on the hard earned pennies of the persecuted, and they deserve to be upheld with the highest esteem.  Our “golden door” seems to be tarnishing.

Give me your tired, your poor,

Your huddled masses yearning to breathe free,

The wretched refuse of your teeming shore.

Send these, the homeless, tempest-tost to me,

I lift my lamp beside the golden door! – Lady Liberty

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2 thoughts on “What about Pennies?

  1. Forget pennies, how about the six-per-centum sales tax on gas and diesel, not one red cent of which goes to roads! That’s the original sin of Michigan’s motor fuel tax regime, and the thing that places the state in the top five in terms of taxes imposed on motor fuel.

  2. Thank you for your informative comment, Mr. McHugh. I couldn’t agree more with you with regards to the six-per-centum tax. There is however a general pathos and underlying principle towards pennies (especially from the poor) that I was trying to address. Think of the neighbor boy selling lemonade, or the little Girl Scout selling cookies. Capitalism in America is not just the big. Similarly, the American tax system (both big and small) has consequences on business. If I discuss tax increases from the bottom up, all my arguments for the bottom apply even more so to the top. In other words, if penny taxes are the symbol of tyranny in America (the penny taxes on tea before the Revolution), how much more atrocious are wasteful, big taxes. I’m calling into question the principle of raising Any tax in economic crisis, because anything, no mater how small, will have ripple effects on “penny businesses.”

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