(NNPA)—I earned my undergraduate degree in tax accounting from Oral Roberts University. Upon graduation, I spent a decade working in tax accounting, both for government and the private sector.
So, in this week’s column, I want to take advantage of my education and training to write about tax law. Let me start by giving the example of how our welfare state has crippled our economy and destroyed the family unit.
Back in the day, if a girl was on welfare, she could not be married or have a male living in the house. If the girl was discovered to be in violation of these rules, she was immediately removed from the welfare rolls, even if that meant hurting her children.
So, in a perverse way, the government was rewarding single motherhood and discouraging marriage with their policy. In simple economics, if you tax (or penalize) something (marriage), you get less of it. If you reward something, you get more of it (fewer single mothers and more marriage).
In a similar manner, governments reward and punish corporations and entrepreneurs by the way they tax earnings. Some industries are more sensitive (elastic) to changes in the tax code than others (inelastic).