Thursday, June 9, 2011

Two Questions; More taxes needed? Do we choose work or the dole?

A friend recently asked my opinion on two questions; (1) whether we should raise taxes and if so, on whom, and (2) given a clear choice, how many of us would choose to be on the dole as opposed to working for our income.

First, let's tackle the tax question. As a general guideline, I'd propose what can be referred to as the 90/10 rule. If we always followed its guidance, we would have, if not an entirely appropriate tax policy, at least a sensible one.

In essence the rule can be stated as follows; if the majority of the people vote to have 90% of the population pay more taxes in a compassionate effort to assist the assumed 10% of the people who really need help, then let's do it. On the other hand, even if 90% of the people would be willing to vote to raise taxes on the remaining 10% of the people in order to spread entitlement benefits throughout the society, then let's not do it.

In other words, "We the People" should have the government that we are willing to pay for with our own money.
Now for the second question; Would most of us choose the dole or work, given a well and clearly explained choice? Choosing the dole or work approach is a false choice in the end. That's because nobody would agree to work and provide the free lunches for those who chose the free lunch route. In other words, we can't all be on the dole and prosper.
When comparing socialism and capitalism, Churchill described the situation thusly, "The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries."

Accordingly, my bet is that pursuant to the be careful what you wish for school of thought, a realistically communicated choice between work and dole would result in the vast majority of our fellow citizens opting for the work route.

But even if I'm wrong and the voters would opt for the dole instead of work, we self chosen workers would simply withdraw from such a socialistic society in which "we" wouldn't fit and clearly wouldn't belong. In sum, if nobody works hard, then nobody lives on easy street with free lunches being served. It's as simple as that.

Currently we rightfully don't trust our elected officials to act routinely in the best interests of our larger society. And that's a genuine problem which needs to be faced directly and continuously until it's solved by "We the People" taking the reins.

In fact, there are far too many factions or special interests which seek and secure particular governmental favors, even though these interests are often contrary to society's interests as a whole, and don't "promote the general Welfare", to cite the Constitution.

For a relevant and still pertinent discussion of the role of special interests or factions and their long term historical influence on government, please refer to James Madison's Federalist paper #10 from 1787 which reads in part as follows, "But the most common and durable source of factions has been the various and unequal distribution of property. Those who hold and those who are without property have ever formed distinct interests in society. . . . The regulation of these varying and interfering interests forms the principal task of modern legislation, and involves the spirit of party and faction in the necessary and ordinary operations of the government."

And when you finish that one, please go to Madison's Federalist paper #51 which points out that men aren't angels, whether the men involved be those men then being governed or those then doing the governing. In sum, government needs to be restricted to having very few powers over the people.

Finally, here's a quote worth remembering from the French anti-socialist Frederic Bastiat. Circa 1850 Bastiat said this of how government functions "The state is that great fiction by which everybody tries to live at the expense of everyone else."

That's the French way. But it never has been and never shall it be the American way. At least that's way I see things.

Thanks. Bob.


  1. This makes perfect sense to me. If I may re-state, first, we should pay for what we want and should therefore expect to get what we pay for. Second, given a choice and a clear explanation of the attending alternatives, most people would choose to work for their daily bread. Furthermore, if they chose not to, those of us from the bcwe set would simply withdraw from society.

    That last part sounds very similar to the scenario that played out in Atlas Shrugged. That was a work of fiction though. If that were to be the only option left, I wonder where we would withdraw to. I also wonder what the government would try to do about it. To continue the book parallel, the powers that be set about enacting law after law to combat the revolt, with each new law requiring a successive law to address the unintended consequences of the prior. The authorities in the fictional work were, in fact, exerting more and more power over the people, in direct contrast to the principle contained in FP #51 that says the government needs to have very few powers over the people.

    It seems to me that there is a real life parallel to be drawn here as well. Every election cycle brings promises, from old and new candidates, to get new laws enacted that will essentially give the government more power over the people. These candidates offer their track records for getting laws passed as proof of their ability to get this done. The more laws they craft and get passed, the better politicians they are considered to be. That seems to be the formula and I suppose it's a valid one. I guess the real point may be that we don't need any more good politicians, if being a good one really does means being effective at taking away personal power. Instead, what we need are some people who believe the problem is a lack of personal power rather than governmental power. Those types would have to work to get some reverse momentum going with regards to enacting legislation. I'm not sure what we'd call these people but, it would need to be something different than "politicians".

    Regardless of what we call them, I think the major hurdle they would face is the one pointed out in FP #10 and inferred (at least by me) in the closing Bastiat quote. The factionalized nature of our society is the reason we have so many "good politicians". As long as there are haves and have-nots, there will be people looking to gain power and wealth by serving their specialized interests - to the detriment of society as a whole. That said, the alternative 'misery and nothingness for all' that is inherent in Churchill's view of what would happen if one faction did ultimately prevail, is obviously a far worse fate.

    So, if the problem is that people haven't been presented a clear, untainted by factionalized politics choice, the answer would seem obvious - present it to them. Simple but not easy, as you used to say, especially since "believing is seeing".


  2. We could call the "new" do nothing politician 'Calvin Coolidge', our 30th President (1923-1929) who famously said, "Collecting more taxes than is absolutely necessary is legalized robbery."

    Thus, my take on silent Cal's point of view would be that no tax money going to the political class would mean that they couldn't spend it since they didn't have it, thereby increasing our individual freedoms or stated another way, not taking/taxing away our freedoms by taking away our money.

    How's that, Keenan?