Taxes, Government, Immigration and Outsourcing

Taxes and immigration

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Taxes and immigrationHow much do you want to pay in taxes? Probably you wish to pay less than your neighbor. Stick it to him, but not to me, because I am special right? I deserve my tax breaks, but the other guy is receiving “welfare” and needs to get off the dole, needs to quit receiving all his unearned benefits and well, maybe if he just left the country, quit being a crybaby and sucked it up like me, then maybe, just maybe life would be fair.

Watching the non-stop protests in Wisconsin along with the counter protests by the tea-party activists is surreal.  Governor Walker is seeking to break the unions, saying they are the reason the state government is drowning in red ink. The state workers are fighting for their livelihood, a livelihood that may or may not be middle class depending on who you ask.

Why is the Tea-Party counter protesting? Because they want a smaller government, and apparently they believe that to get smaller government, you need to get rid of public employee unions. Plus if you ask them, government is ineffective, inefficient and over-bloated.

Who is right? Well as true in most situations of disagreement, they both are. The unions are rightly upset because old agreements are being broken. Who wouldn’t fight that tooth and nail? If this were a private contract it would be headed to court for breach. And the Tea Party is right on many counts too. The commitments the politicians made to the public employee unions are unsustainable, especially when it comes to the defined benefit pensions.

So what are we to do? Let’s consider a scenario if Governor Walker gets his way. Government could save money by outsourcing its services. All government websites could be built and maintained in India, because labor there runs about $5 per hour instead of a comparable $60 per hour in the US for the same services.  Huge savings!  All call centers could be routed to the Philippines, because they speak English well and will work for much less than the typical American.  Imagine calling to the DMV to resolve a problem with your billing, and getting a nice young lady on the phone that is half a world away. Wouldn’t that make you feel good about your local government?

The more I think about it, this is also a solution for our immigration problem. If we outsourced our work south of the border, those illegal immigrants that Arizona is so worried about wouldn’t need to come over here to take jobs from Americans. We can just ship the jobs directly to them. We can pay them sub-minimum wage and save the government even more money. It is a win win win, because we save money on local government services, we stem the tide of immigration and we can lower our taxes all at the same time.

But wait, none of this takes into account the unemployment rate. Uh oh, I new there had to be a downside. The federal government is the largest single employer in the United States and state governments are also some of the largest employers contributing to the success of our national economy.  If you eliminate or significantly decrease the pay of a substantial portion of these workers, you will decrease the money flowing into the economy and it will affect all the small businesses in the country also, which will upset the Tea Party even more because even though their taxes go down, the benefits they receive from government spending will also decrease.

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