If tax increases hurt the economy why does the gov keep allowing them?

[JGrant]

I've been reading about tariffs and tax increases. There is a 1% sales tax increase proposed in California to alleviate some budget woes at this time...Cali isn't doing so well right now as far as a state budget is concerned. We already have the highest or one of the highest sales tax in the nation and a 1& increase would bring us to a 9.25% rate in LA county.

So I started looking into tax increases and about a decade ago when we were just coming off a recession (growth stage) our gov mandated an increase in sales tax.

The data I see....if it is correct...is that economic growth and sales plummeted right after this happened. And this was after a couple of months following the end of a recession when the economy started improving gradually.

So if the data like this is available and factual, why would the gov or those in government positions want a sales tax increase?

It sounds like you are only paying a few more dollars per year but the effect as demonstrated by the studies show a big drop in economic activity.

[Mnukedude]

Very simple: Your local legislature is so greedy for more of your money they don't care what they do to the economy.

[RonS]

They are like a gambler, they just know that any time now it is going to work, they are going to find the magic pill that makes it all better. So they keep passing laws, spending money and outlawing and regulating things and don't understand why it keeps getting worse.

We need to get rid of at least half the laws, regulations, government employees and taxes. Half of our problems are caused by government interferance in the economy. Take Fannie Mae and Freddie Mac. Some bunch of politicians thought it would be a good idea if everybody could own their own home (makes them look compasionate). So they used tax dollars to make loans available to more people, which made for higher home prices and risky loans and now we get to pay to fix the problem we paid to create.

Cut the federal budget in half. Get rid of HUD. Get rid of any federal agency in any way involved in education. Cut, cut, cut. Regan was right, his plan worked and they have undone every bit of good he did in getting rid of the welfare state.

YOU GET THE BEHAVIOR THAT YOU REWARD. We are rewarding people for being lazy, stupid and irresponsible.

[Swanny]

Better question is why we keep allowing them.

[Daynja]

I think because it hurts a politician more when they tell a school that they won't be getting that requested 30% budget increase than when they raise taxes.

and it's an endless cycle...for some reason the federal government didn't need income taxes before 100 years ago? Why did the role of government change so much that they decided they needed more tax money?

[Swanny]

The other thing to consider is why the government keeps deficit spending policies in place. Either you raise taxes to pay for your budget, or your borrow. Sooner or later, you have to pay. The problem is, if you choose to pay later, you have to deal with a lot of interest. However, if you are a politician, you love to "spend now", because you are hoping the "pay later" won't come during your tenure.