12.16.2011 0

Big government victims need protection, too.

By Rebekah Rast — If you ever ran a lemonade stand as a child you were aware of the basic market principles of supply and demand.

If your lemonade was sold at too high a price, you likely didn’t get much business, or if you sold ice cold lemonade during a snowy day, or you skimped on the sugar, you probably didn’t sell more than one cup.

Industries today are no different.

When the free market system runs without interference or manipulation, consumers and businesses will flourish with satisfaction and stability.  However, in today’s America, the free market has been bombarded with various government incentives and subsidies and has resulted in a struggling economy, a nonproductive business environment, tepid consumers and an overactive government.

Consumers and businesses have learned firsthand that free markets and government-sponsored systems cannot work together.  One will always be deemed a winner and the other a loser.

But separating these two ideas and forever ridding American markets of political favoritism is extremely difficult if not next to impossible.

Take for example former House Speaker and presidential candidate Newt Gingrich’s conversation about subsidies with Glenn Beck.  When Beck asked, “Why would we, why would we go into subsidies, though? Isn’t — aren’t subsidies really some of the biggest problems that we have with our spending and out‑of‑control picking of winners and losers?” Newt responded with, “Well, it depends on what you’re subsidizing.”

It is no secret that despite being a self-proclaimed fiscal conservative, Gingrich is pro ethanol subsidies.  Of course, it is also important to note that some of his biggest donors are from the ethanol industry.

This is precisely why the process of picking winners and losers through the use of subsidies, tax incentives or write-offs exists.  Social welfare plays a huge role in politics. It doesn’t take much to find the political supporter behind the subsidy.  After all, who is going to vote to wipe out their own money-making industry or vote themselves out of job?

More than just playing a heavy role in the decision-making of politicians, there is another place where subsidies, write-offs, incentives and credits run wild — the U.S. tax code.

The tax code is set up for winners and loser.  If you own a house, you’re a winner; you get to write off your mortgage interest and real estate taxes.  If you have children, you’re a winner; you get an automatic tax credit.  If you don’t make a lot of money, you’re likely a winner and will receive an Earned Income Tax Credit.

On the other hand, if you’re a renter, you’re a loser because your rent isn’t subsidized.  If you have a double income and don’t have any children, you’re a loser because you pay more taxes.  If you are a middle-income earner, you’re a loser because your income isn’t subsidized by the government.

Sound fair?

It’s not, but that’s what happens when personal interests pollute the political process.  Everyone wants a piece of the pie.  What if all incentives, tax credits, write-offs and subsidies were eliminated? What if all people and businesses operated on a completely level playing field?

April 15 would sure be a lot easier.  You would know exactly how much of your money goes to the government, which would likely 10 to 15 percent a year.  Also, your life would not be dictated by the tax code.  If you don’t ever want to buy a home, you don’t have to and you won’t be subsidizing those who choose to own a home.  Likewise, all businesses would have an even playing field.  Consumers would decide which products and industries are successful and which are not rather than a team of tax accountants and Gucci-shoed lawyers and lobbyists.

Though the idea of a flat tax has been floated in the halls of Congress before, it likely won’t ever happen.

Just like running your childhood lemonade stand, there will always be someone with an unfair advantage competing with you, whether it simply is that they are cuter than you or their mom or dad worked for the sugar industry and get their sugar for free.

Rebekah Rast is a contributing editor to Americans for Limited Government (ALG) and NetRightDaily.com.  You can follow her on twitter at @RebekahRast.

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