Freedom Lost – How Big Government Systematically Destroys Individual Wealth

“You’ve got to know when to hold ‘em, know when to fold ‘em, Know when to walk away, know when to run.” …Kenny Rogers


ELDER PATRIOT – Walmart and the U.S. government both employ approximately 2.1 million people.  Walmart netted just under $16 Billion last year on $476 Billion in sales.  During the same time period the U.S. government lost $483 Billion dollars last year on revenues of $3 Trillion.


On average, each of Walmart’s 2.1 million employees generates slightly over $7600 in profits, annually.  That pales in comparison to the approximately $31,000 that each Walmart employee generated in income, payroll, and sales taxes in 2014.  That $31,000 doesn’t include property taxes, supply chain taxes such as gasoline and highway taxes, and duties and fees associated with the importation of inventory.


In 2014 federal, state and local governments feasted on Walmart in an amount far exceeding $65 Billion in taxes, four times the amount of the retailer’s profits, raising the question who really owns Walmart?  As with other companies, Walmart’s investors were responsible for taking on all of the risk involved.  The government takes no risk but confiscates 80% the profits.


Walmart, and other mega corporations aren’t the only companies being extorted by government.  Main street businesses are being hit hard, as well.


Take the case of my friend’s carwash in Bloomfield, NJ.  Occupying slightly over 1 acre, his annual property taxes are $60,000. In today’s market, washing 60,000 cars annually makes for a fairly healthy business.  If customers were willing to pay $10 on average (they’re not,) property taxes alone would take 10% from top line sales.


Businesses are not the only ones being extorted by government.  Your purchasing power is also being crippled because you are being forced to pay all of these taxes when you buy goods and services.


Walmart would be able to offer even lower prices by as much as 13%.  Perhaps they would choose to hasten expansion and spread their lower priced quality products to more customers instead.  Or, maybe they’d decide on a combination of both.


In the case of the carwash, that $60,000 would make the difference between keeping the business open or closing it.  When competition diminishes prices go up, and service and quality suffer.  Always the consumer pays.


The 2.1 million federal employees each cost us in excess of $537,000 each year.  Their average salary of $121,000 is almost 3 times that of a Walmart employee.  Worse, on average their work product costs the taxpayer an additional $416,000 each year.


In total, this big government experiment has us $18 trillion dollars in debt with over $100 trillion in unfunded liabilities on top of that.  The more we spend the worse things get.  If this were a business it would have been forced to close down a century ago.  Ronald Reagan said it best:


“Government is not the solution to our problem.  Government is the problem.”


We’ve tried big government and it has failed.  Not just here in America.  It has failed everywhere it has been implemented.  It’s time to heed the words of Kenny Rogers.  When it comes to big government, it’s about time we fold ‘em and run away.