Perhaps a better way to put it is: What conditions lead to prosperity?

Those would be low taxes, reasonable regulation, and a fiscally stable and sustainable government. History shows that societies where the state has first claim on the people’s resources do not produce the same level of income growth and general well-being as societies that allow individuals, working together, to innovate and increase their
wealth to everyone’s benefit.*[

Limits on the amount that government may consume from the private sector are also vitally important over the long run. For example, one of the world’s most stable and prosperous societies, Switzerland, has strong constitutional limits on government taxing, spending, and borrowing.

See also, for example, the Heritage Foundation’s Index of Economic Freedom and the connection
between limited government prosperity here.

It is also increasingly doubtful that traditional Keynesian responses to economic downturns are effective.
The following studies are worth considering in this regard: 1, 2 and 3.

Vice President of the National Taxpayers Union, Pete Sepp

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It costs jobs. Particularly for part time workers, or interns, the minimum wage reduces flexibility for businesses to hire. For further elaboration, see NTU's documents, Minimum Wage Hurts and
Open Letter to the Governor on the Effect of Minimum Wage Increase.

Vice President of the National Taxpayers Union, Pete Sepp

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Government contributes to a growing economy by creating a consistent legal system that protects property rights and innovation. Also, by fostering a friendly business environment, where one business does not get preferential treatment over another, commercial activity enriches the many instead of the politically-connected few.

A small and responsible government that keeps taxes low and provides basic functions according to a constitutional charter, allows the most effective mechanism for distributing goods and services, the free market, to flourish. That creates a consumer-driven economy with a low burden of government, and prosperity is inevitable. We know this to be the case not only internationally (see above, but among the states. See, for example, the American Legislative Exchange Council’s analysis, Rich States, Poor States.

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2011 saw a focus on public sector unions. These unions have secured defined benefit pensions, and top-of-the-line health care benefits that are completely out of whack with private sector benefits, and what taxpayers can afford. Furthermore, the debt and future liabilities that states have accumulated due to these deals is making the economic outlook bleak for many states. Clearly the benefits that have been negotiated are unsustainable, and we saw this in Wisconsin in 2011 where a battle was waged over sensible reductions to public sector union pensions.

Vice President of the National Taxpayers Union, Pete Sepp

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“High taxes on the wealthy” is a political public relations talking point. In reality taxes that are raised on the “so-called rich” hurt a wide range of small business owners, and stifle job creation. There are numerous myths surrounding the burden of taxes that the wealthy shoulder; one of the most popular destinations on NTU’s website is "Who Pays Income Taxes?" which many people find to be a real eye-opener. But even by other measurements, the wealthy bear a huge amount of the tax load, often to the detriment of our economy.

Vice President of the National Taxpayers Union, Pete Sepp

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Clearly current tax law is too detrimental to the health of our economy. For more than 10 years, NTU has tracked this problem through our study, A Taxing Trend.

Our Tax Code should stress several principles, including simplicity, neutrality toward types of economic activities, sustainability in support of basic government functions, and transparency to the citizens who will pay the levies.

Here are several recent NTU testimonies and commentaries on tax reform that better outline our position:
1, 2, 3, 4 and 5.

NTU advocates for either a flat-rate income tax system or the so-called “Fair Tax” retail consumption tax, although a great deal of progress toward simplifying the system could be made in other ways. For example, in 2010, Senators Ron Wyden (D-OR) and Judd Gregg (retired, R-NH) proposed a fundamental restructuring of the Tax Code that would help to enhance the nation’s economic competitiveness while reaching goals that both the political right and the political left profess. NTU supported several elements of this plan. Even before then, NTU joined in an effort to outline the basics of tax reform that could serve as the foundation for a bipartisan effort, see 1 and 2.

Vice President of the National Taxpayers Union, Pete Sepp

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We should strive to have an information-based society, where accurate facts are available to everyone. In a country with freedom of speech, people will always be entitled to their opinions on how things should be run. The numbers don’t lie though. Beyond that, we should always remember that fiscal policy is not just about balance sheets, tax rates, and statistics. It is about real, live people, and their expectations of how their government should serve them. From this flows questions of how, and how much, they should contribute toward such a government. At NTU we believe that these questions involve fundamental considerations of human rights.

Vice President of the National Taxpayers Union, Pete Sepp

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