Wednesday, May 5, 2010

The Government Giveth, And Taketh Away

I have heard the statement that Government through the method of taxation is by definition a Socialist enterprise. It is a world view that suggests Government is stealing from one group of citizens (the wealthy) to give to another lot (the undeserving). If you view taxes in this light the whole concept of nationhood loses meaning. If taxes are theft then the United States is an ideal that has passed it's sell-by date. I happen to disagree with the modern notion that taxes are theft; here's why.

"From each according to his ability, to each according to his means" is the oft-quoted Communist dictum that is used to support the proposition of taxes as theft and despite the appeal of the simplicity of the idea, theft is not what taxation is about. It is about creating and supporting a cohesive public entity- the Res Publica ("Public Thing") of which the Romans spoke so many years ago. The Res Publica provided citizens a safe place in which to trade, engage in debate, learn and raise families and live peaceful meaningful lives. The Res Publica kept enemies at bay and welcomed merchants and suppliers. And through this trade the Res Publica helped citizens to create wealth. And part of that wealth was paid back to the Public Thing to support the system that allowed the creation of wealth. It is a circular argument that has been in effect ever since humans banded together.

During the 20th century huge fortunes were built within our own Public Thing, our Republic called the United States and with an ever expanding population, a supply of cheap energy and an energetic population there was money to be made. Lots of it. With a vast internal market to be supplied anyone who created a useful tool or product stood an excellent chance of doing very well. Microsoft is the obvious example, built from nothing it created vast wealth for it's founders and provided useful tools to the citizens of the Public Thing. Those citizens it was who gave Bill Gates his preeminent social position of wealthiest man in the world. Certainly he created a tool that benefited him, but had the citizens not bought the Microsoft products Gates and his company would have been worth exactly that.

Nowadays people who have lived prosperous lives protected and nurtured by the Public Thing, whose wealth has been created or enhanced by the ready market of 300 million fellow citizens who buy the products and use the services, all this goodness they tell us is not worth supporting with taxes. The question one has to ask oneself, to use an extreme example: Would Bill Gates be as wealthy as he is, had he invented Microsoft in say, Kenya or Latvia where the home markets are tiny? It's possible, but it would have been surprising to say the least. Instead it comes as no surprise to learn that the world's population of billionaires is concentrated in the United States, the land that nurtures enterprise and open markets. It does however come as a surprise to me to hear how much these people want to wreck the Public thing that has been the crucible of all this enterprise and wealth.

The fact is, without income the United States cannot function. Take away taxes and this cradle of peace and stability fades away. It's a simple enough equation, without money we lose infrastructure like roads, clean drinking water, telephone and high speed Internet connections and all the rest of the stuff that it takes to run a modern country. And when one understands that in this country taxes are lower than in any other industrialized nation one has to ask: What's the beef? This insistence on cutting taxes, rendering it impossible to function as a state is having deleterious effects already on our civilization and our ability to prosper as a people.

Lack of government oversight and enforcement of regulations has led to serious deficiencies in our industrialized food supply. Lack of oversight has led to the implosion of our financial system. Lack of public debate has led to our involvement in wars that are draining our ability to meet our own national needs. The general tone of distrust of government in the US is leading to disaffection and lethargy. We need to separate the people who propose and implement failed policies from the system that they have corrupted. Instead our leaders convince the mass of people, people who have no hope of attaining independent wealth, that government is their downfall.

Look to corporate lobbying and malfeasance for the source of our troubles. Not the tax code.


Milton's Freeman said...

Inconvenient truths...
If only gov't limited it's efforts to "roads, clean drinking water, telephone and high speed Internet connections" as you suggest, Libertarians would truly have little to complain about... but you conveniently stepped over the huge costs of the "morally obligated" social(ist) programs (social security, medicare, medicaid, etc., etc.)...
which has made gov't the largest employer in the nation.
... and not to nitpick, but the U.S. is not the lowest taxed developed nation in the world. S.Korea, Ireland, New Zealand, Japan, etc. all have lower tax burdens than the Amerika.

Conchscooter said...

I seem to recall medicare and medicaid were institued to help starving Americans at the end of their rope. Socialism in a good cause, if socialism it be. Much better than spending public money blowing up Afghanistan.