Want to Really Cut Taxes? Cut Government Spending.

by Frank Shostak

New government spending projects amount to little more than government squandering wealth. The fact that the private sector does not undertake these projects indicates that they are of low priority to individuals. The implementation of these projects will undermine the well-being of individuals, because they are funded at the expense of projects that are of a higher priority and would otherwise be undertaken in the private sector.

Moreover, whenever wealth producers exchange their products with each other, the exchange is voluntary. Every producer exchanges goods in his possession for goods that he believes will raise his living standard. The crux of the matter is that the trade must be freely undertaken. Government activities, however, are of a coercive nature; they are funded by forcing wealth producers to part with their wealth in exchange for less desirable government services. Producers of wealth are forced to exchange more for less. Obviously, this impairs their well-being.

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