Saturday, October 23, 2010

The right way to think about taxes

Pick a neighbor (that you like, or a friend, if you hate your neighbors). Let's call that neighbor (or friend) "Steve". Now, pick a government provided service.

Are you comfortable with putting Steve in jail if he refused to help pay for that service?

That is a completely proper way to view taxes and government spending in general because that is precisely how things function. (See why it only works if you like Steve?)

Now, it's easy to say, "sure, I think Steve deserves to go to jail if he doesn't pay his fair share to support local law enforcement". Obviously, there are many legitimate functions of government that make us comfortable with the fact that we fund our government by threat of force (i.e., don't pay your taxes, and you go to jail; tell the police that you refuse to go jail over taxes, and violence is guaranteed to result).

But what about this one? "I think Steve deserves to go to jail if he doesn't pay his fair share to buy 14 copies of Harold & Kumar go to White Castle for the local library."

Of course not. No sane person would ever say that. Yet, the Chicago Public Library has 14 copies of Harold & Kumar go to White Castle on DVD.

Sane people will, however, often respond this way: "well, Steve's fair share for 14 DVDs of a movie that actually makes viewers more stupid as they watch it is only 1% of 1 penny, so it's reasonable to expect him to have to pay it." (this is that whole "distributed costs, concentrated benefits" part of economics that they don't teach in government schools)

My reply: So, you are willing to send police to Steve's house, understanding that violence may ensue, to collect one penny if he refuses to duly support easy public access to Harold & Kumar? You think 1 penny is worth taking away one person's freedom?

Again, no sane person would say they support depriving a person of their basic liberties over one penny. And in the real world, it's not one penny, it's trillions of pennies being spent every year on things the government has no legitimate business funding.

Let's try some more: Would you put Steve in jail if he refused to pay for his share of...

...the poor-kid-down-the-street's Algebra textbook?
...your son's Algebra textbook?
...the rich-guy's-son-next-door's Algebra textbook?
...your school's football team's bus trip to play in the state finals?
...the county park on the other side of the state?
...the state park in another state?
...the local fire department's boat?
...the pension, after 20 years of service, at 90% of a $175,000 a year salary for the captain of the fire department's boat?
...airport security?
...the local NFL team's new stadium?
...a staff of 50 for a county commission on human rights?
...maintenance on the fire department's main fire engine?

This list is endless, of course, and the answers you give will probably vary from "yes", to "no", to, "ooohh, that one's a tough call". Your answers also might depend on whether or not you think Harold & Kumar are hilarious.

The next time you think the government should do something, ask yourself if you are willing to see Steve thrown in jail if he refused to help pay for it. Oh, and you ARE Steve.

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