Another TAX Day. The song Too Late to Apologize, A Declaration seems appropriate. I wonder what the Founding Fathers would have thought of our tax system and our fiscal mess? Scratch that. Actually, I don’t wonder at all.
Taxation and Rebellion
- Donald R. McClarey
Donald R. McClarey
Cradle Catholic. Active in the pro-life movement since 1973. Father of three, one in Heaven, and happily married for 43 years. Small town lawyer and amateur historian. Former president of the board of directors of the local crisis pregnancy center for a decade.
For the first time ever, we have reached my goal, net owing or “refunded” nearly zero (between state and federal). My wife has only finally understood over the past 3-4 years why this is important to me.
I’m going to disagree with Sowell in part. There’s a great deal of refuse in public sector budgets (and that refuse has constituents who want it defended), The bulk of the spending consists of the regulatory architecture of society and of useful services which do not emerge naturally on the open market. (That would be the courts, the police, the prison system, civil inspectorates, public works, the military). There is no private sector analogue to that and the most dubious components are commonly those with the smallest budgets. Other components consist of common provision which has broad constituencies – public education, veterans benefits, Social Security, Medicare, Medicaid. One can certainly think of salutary ways of restructuring such programs. People who propose to eliminate them without generating a social crisis are welcome to show their work. There’s also some derivative spending (on support staff agencies and interest on the public debt) that cannot be rapidly reduced.
Taxes become more onerous when the safety net provided becomes a hammock.
Art,
…I think you accidentally make Sowell’s point.
You say that public education, veterans benefits, Social Security, Medicare, Medicaid, all these have broad constituencies. Well, that’s true.
…And that’s the problem.
We assume government must provide for these needs, we never consider either how each constituency might provide itself, nor the consequences of being dependent on government.
Parents don’t expect to teach their children to read, write, or do math. We expect public schools to provide this. ..then find ourselves fighting for school libraries to have Bibles or not.
Mothers and fathers …only function as mothers and fathers for duty’s sake. We all know how sex and babies are linked, so …many provide for kids materially, yet do not view parenthood as a vocation.
Our original framework of government expected the citizenry to provide for most of these needs for themselves. Churches and civic organizations too.
Instead of assuming that we’ll have civil unrest and crowded prisons otherwise, we ought to be thinking about how we can prevent such maladies from occurring without government giving us a constant social bail-out.
John, these aren’t baubles for attentive publics like the Export-Import Bank.
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Public schools have been common in this country since the ante-bellum era. Yes, schooling is a fee-for-service activity which can appear on the open market. However, there are two concerns regarding it: one is corralling effective demand to have services available to dispersed publics. The other is a distributional question which seeks to have a baseline of schooling available to all. Now, you can contrive other delivery means, but that’s not your complaint. Schooling has long had a philanthropic component, btw.
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Another with a philanthropic component is long term care. As it happens, it has since the late 19th century had a public component as well. Medicaid was a partial replacement for that public component.
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Medical care has also long had a philanthropic component and in the early 20th century you had various public institutions as well. The revenue stream encompassed a smaller share of gross output than is the case today, but lots of good and services see increases and decreases in people’s propensity to spend on them. The first decades of the century saw experimentation in methods of financing medical care given the unpredictable and severe spikes in propensity to spend to which medical care is prone. These would include common purchase of services through fraternal lodges and private health insurance. Medicare was an effort (somewhat ill conceived) to introduce a systematic solution for a population for which you could not construct stable private actuarial pools.
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In 1965, the legislation establishing Medicare and Medicaid received an affirmative vote from > 70% of those in Congress, among them 50% of House Republicans and 40% of Senate Republicans.
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Social Security was enacted in 1935. Fully 85% of those in Congress at the time voted in favor of the bill, including 2/3 of the Congressional Republican caucus.
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These aren’t regulatory measures you can get rid of while causing nuisance problems to small constituencies. These programs are embedded in people’s lifetime financial planning. There isn’t a ready real-time replacement for the issues they attempt to address.
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Be my guest, Mr. Flaherty. You and Wm. Voegeli and Patrick Frey can all go on a speaking tour and make your case for trying to finance the medical sector with private donations, make your case for universal home schooling, make your case for treating medical expenses as the equivalent of buying a hot water heater, make your case for long-term care centers financed by private donations, make your case for eliminating Social Security. Go to it. I would recommend you bring a brawny family member to operate a vaudeville hook because you’re gonna need it just as soon as Patrick Frey starts trying to answer questions from the audience. Don’t need any rhetorical failures to add to the challenge you already face.
“…these aren’t baubles for attentive publics like the Export-Import Bank.”
“There isn’t a ready real-time replacement for the issues they attempt to address.”
I regret these two statements well depict the degree of the problem we have.
If anything, your comments demonstrate why “bipartisan” has become almost a curse word. Too many elected Republicans won’t try to challenge the narrative.
No, they aren’t baubles for an enlightened few.
No, there isn’t a ready real-time replacements for the issues involved.
Then again, we shouldn’t be expecting any either.
If we’re going to talk about the merits of these programs, …let’s do so.
You commented, essentially, about how education sought to establish a baseline standard of knowledge. That’s great, except we have never agreed upon what the baseline IS. Minorities and women scream “racism” or “sexism” a lot, or “oppression”. (Often the outrage in question is stated in rather more…pungent… language.)
So, students in inner cities frequently don’t buckle down to learning their a,b,c’s and 1,2,3’s. …Inner city test scores have notoriously been the worst in the nation.
Similar kinds of concern affect the other programs in question.
People who’ve worked blue-collar (low-paying) jobs all their lives suddenly throw a hissy-fit if the same-age investor across town lives a better lifestyle. ..And expect Social Security, Medicare, Medicaid, and sometimes veterans benefits to make up the difference. They don’t provoke their next generation to prepare to improve their own lot.
If we can’t agree on a baseline, we won’t agree about meeting it.
Only way I see solving that will be for government to desist with funding much of anything outside of genuine common needs. Fire, police, defense. Typical law and order.
If we must insist on public schools, let’s at least summarily abolish the Department of Education, encourage each State doing likewise. Let actual parents of actual children sit on actual school boards in individual communities decide what children ought to learn. And what not.
Desist with thinking that being equal in dignity means we all live the same life. It should be obvious by now that we will not.
Only way I see solving that will be for government to desist with funding much of anything outside of genuine common needs.
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That does not follow from your previous points. You just assert that the proper baseline is ‘zero’. Whatever you can get people to agree on, you will get no advocates for that position aside from you and Wm. Voegeli and someone associated with the Ayn Rand Institute.
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You need to listen. My reference was a baseline standard of consumption, not a baseline standard of knowledge. Expenditures on staff, plant, and equipment are a conduit to knowledge, which requires proper pedagogy. You cannot have schools without that stuff that costs money; doesn’t guarantee the money will be efficiently expended.
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The ratio of public expenditure on primary and secondary schooling to gross output doubled between 1939 and 1969. At that point, it hit a plateau where it remains. The ratio of school-age children to the remainder of the population has declined by about 40% since 1969, so you can argue there has been an effective increase in commitments since that time and will continue to be as other age segments grow faster than that of school-age children; since the share of the population consisting of school age children has declined from 17.3% in 1994 to 16% in 2024, I don’t see much of an increase in commitment attributable to demographic rebalancing. You have the baseline tolerated. You could argue for a reduction, but arguing for nil is a tall order.
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<i>People who’ve worked blue-collar (low-paying) jobs all their lives suddenly throw a hissy-fit if the same-age investor across town lives a better lifestyle. ..And expect Social Security, Medicare, Medicaid, and sometimes veterans benefits to make up the difference. </i>
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Such a person may exist outside your imagination; I’ve never met that person. I have met people who expect Social Security, Medicare, Medicaid, and veterans benefits to be there for them because the cost of the first two was reflected in their pay stub every two weeks for 40-odd years and (contingently) the cost of the latter two as well (though they’ll expect the last only if they paid their dues). They’re concerned about how long their retirement accounts will last, about whether or not they’ll have to sell their house, if they’ll be able to work a side job if necessary, and if their children will add some cash to their till now and again or allow them to live on their property. (While we’re at it, lots of blue collar jobs incorporate skill sets which generate satisfactory wages). There are severely impecunious people among the elderly, but for 40-odd years such a state has been no more common among the elderly than it has among the rest of the population.
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<i>If anything, your comments demonstrate why “bipartisan” has become almost a curse word. Too many elected Republicans won’t try to challenge the narrative.</i>
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My business in discussing the balance of forces in the legislature in 1965 and 1935 was to try to impress upon you that the major programs were enacted self-consciously, transparently, and with the assent of both parties. IOW, there was broad though not complete agreement that some sort of defect in the social economy ought to be addressed. Much of the opposition (see James Wadsworth in 1935, Ronald Reagan in 1965) was not categorical opposition. Wadsworth was concerned about the actual dimension of future commitments and Reagan was concerned that previously enacted programs meant to address the question of finance of medical care had not been in effect long enough for their utility to be assessed. You don’t seem the least bit curious about why these programs were enacted or in how they operate or in how you might address defects in them.
Art,
I have listened carefully to everything you have said. I have disagreed with your premises and conclusions and given reasons why.
I am well aware most people don’t agree. Not yet.
I have learned plenty about the merits of public schools, Social Security and other programs. Also why we need various social welfare efforts. . Most began with best intentions in mind. ..Most also began despite legitimate critique about possible consequences.
You declare:
“The ratio of public expenditure on primary and secondary schooling to gross output doubled between 1939 and 1969. At that point, it hit a plateau where it remains.”
Yes, it doubled. …It did not halve or shrink. T’would seem that even the crazy production ramp-up to handle World War II did not cause the ratio to fall. And, as you say, it plateaued in 1969. So, production increased, yet so did the cost of education. …Why?
High school, undergraduate, masters program, these weren’t easy, yet they weren’t that tough either. They didn’t require exorbitant intelligence, mostly persistence.
..Yet I still hear that employers struggle to find qualified applicants. So, …education levels have gone down, not up. Yet cost of education has not changed.
Those trends don’t make sense together.
“I have met people who expect Social Security, Medicare, Medicaid, and veterans benefits to be there…”
So have I. That’s the problem.
People expect to be at least slightly comfortable. Yet they have not learned to invest their money wisely to prepare for these needs. They haven’t learned how to seek larger returns. Too many people have admired Warren Buffett or Peter Lynch for their investing acumen, …yet have not learned to imitate their example.
They have again become dependent on government, not themselves.
I would note that any actuary at a reputable insurance company can tell you that neither Medicare nor Social Security would be in compliance with laws and regulations that apply to private companies. The math is the same for government and the politicians of both both parties refuse to acknowledge the facts.
I would note that any actuary at a reputable insurance company can tell you that neither Medicare nor Social Security would be in compliance with laws and regulations that apply to private companies. The math is the same for government and the politicians of both both parties refuse to acknowledge the facts.
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The one is a collective purchasing plan and the other is an income transfer plan. They have features in common with insurance plans and pension plans, but they remain sound through different avenues.
Taxes become more onerous when the safety net provided becomes a hammock.
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That’s cute. There are some troublesome programs and there are some non-troublesome programs which have porous eligibility criteria (see SSI and Social Security Disability). However, the vast bulk of the expenditure is for the benefit of elderly and disabled people and expenditure for medical care and long-term care exceeds that for distributing cash.
Two of the different avenues though which they ” remain sound” are forced participation and a virtually unfettered ability to raise prices.
Only suicidal politicians vote “against grandma”
So, production increased, yet so did the cost of education. …Why?
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It’s a labor intensive activity and public agencies have to pay salaries which will induce people to teach and remain teaching rather than seeking employment elsewhere.
Two of the different avenues though which they ” remain sound” are forced participation and a virtually unfettered ability to raise prices.
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Not sure what ‘prices’ you are referring to here.
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Only suicidal politicians vote “against grandma”
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Well, here’s the thing. Grandma and grandma’s husband saw withholding on their pay stub for 40 years to pay for a publicly financed medical care available when they were 65 years of age and you and Mr. Flaherty propose to discontinue the program without notice at a time in their life when they are least able to respond to economic shocks. There’s a reason Mr. Sailer refers to libertarianism as ‘applied autism’.
They haven’t learned how to seek larger return
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There can be, society-wide, no larger real returns than can be had from incremental improvements in productivity.
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They have again become dependent on government, not themselves.
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Mr. Flaherty, go visit a nursing home or a maternity ward. All of us come into this life in a dependent position and most of us leave in the same circumstance. It’s called the life cycle, and you cannot do a damned thing about it.
I’m not sure what Flaherty proposed, but I made no proposal to discontinue any program, with or without notice.
I simply believe that most government programs giving aid are in some sense corrosive to those receiving the aid because of how it becomes an expectation. On the other end, charity with other people’s money is substantially different than charity with one’s own money, both in how that money gets spent and in the theological effects on the giver.
I simply believe that most government programs giving aid are in some sense corrosive to those receiving the aid because of how it becomes an expectation.
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Waal, why not specify which ones you want eliminated.
“The one is a collective purchasing plan and the other is an income transfer plan.”
In any other context, “income transfer” is construed a euphemism for theft.
“Mr. Flaherty, go visit a nursing home or a maternity ward. All of us come into this life in a dependent position and most of us leave in the same circumstance. It’s called the life cycle, and you cannot do a damned thing about it.”
Really? I remind you that the basic-most cause for education to exist…is that we WILL do a damned thing about it. Parents may seek advice, sometimes also practical help, about raising children, including from churches.. As we…age… we learn our 1,2,3s and a,b,cs precisely that we may prepare for ourselves best for life. And retirement. . …and death.
I note my original comment considered that your comment, Art, seemed to me to confirm Mr. Sowell’s thought. You seem to view Social Security et al as “useful services which do not emerge naturally on the open market….”, Mr Sowell seems to consider them near enough to Christmas gifts from the government. ..delivered by a potentially fictional elf, no less.
You declared yourself how Social Security began in 1935. So, society managed to survive for 1,935 years without these “useful services” being provided by government. Dang, that’s the bulk of 2 millennia.
I considered about 20 years ago, maybe 30, how we might need to wean ourselves away from social programs. Slowly reduce spending for social concerns, give people time to re-align their plans. Sadly, I’ve come to conclude that such won’t work. Too easy to “exempt” this or that from any needed reductions.
I think more likely will be a need to establish a date maybe four years down the line. Government funding and services will end on that date. We will thus have time to each of us prepare.
We’ll need to fight intense negative press each step of the way, and afterward.
…Or not.
I think it mildly possible that, once we would begin such efforts, once people remember how they CAN actually do things themselves FOR themselves, …they may be much more eager.
I can hope that my various comments will hasten that day.
You seem to view Social Security et al as “useful services which do not emerge naturally on the open market….”,
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No, I don’t and never suggested that. You don’t listen. Social Security is not what economists call a public good. It is common provision.
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For all the verbiage you put down, you haven’t even a sketch of a plan over how you intend to accomplish what you propose to accomplish nor an explanation of why the social ills you intend to introduce are less deplorable than the social ills we face today. You seem to have only the vaguest idea of what the smorgasbord of programs is. Not very impressive.
“Social Security is not what economists call a public good. It is common provision.”
Mmm. That’s the basic problem and where we diverge. You see public good as different from common provision. ..I see them as the same thing.
Common provision, public good, …those things which society cannot live without.
“…nor an explanation of why the social ills you intend to introduce are less deplorable than the social ills we face today.”
I contend the social ills I would introduce…are the social ills we face. They never left or suffered defeat. I contend government cannot solve them.
Our Founding Fathers assumed each man could fail, thus each man needed be responsible for himself , act for his own best interest, lest he fail. Our “progressive” era insists government must prevent anyone failing. ..And nary the twain shall meet.
Ronald Reagan was correct to declare that the best thing that government could do was… get out of the way.
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