Wednesday, April 20, 2016

Statist Premises in the Budget Debate

The Republican-controlled House of Representatives passed a budget that will reduce the growth of federal spending by $1.3 trillion dollars over the next 10 years. Thus, taxpayers will get to keep $1.3 trillion dollars more of their earnings.

Of course, that's not the way the Left portrays it. In its typical Orwellian dishonesty, it portrays the reduced growth as actual spending cuts, even though the budget will still grow by 32% by 2026. That includes the New Jersey Star-Ledger.

Details aside, I want to focus on basic premises that statists sneak into the budget dialogue. One statist premise, of course, is the spending-increase-is-a-spending-cut premise. In its critique of the GOP budget, House Republicans proposed spending cuts make Scrooge look good, the Star-Ledger advances two more statist premises.

I left these comments, responding to these two premises:

“Every tax cut is another type of federal expenditure. . .”

Think of the insidious premise this statement rests on. The Star-Ledger is essentially saying that more money kept in the hands of the people who earned, via tax cuts, is a government handout. The same could be said of every dollar you earn. If that is the case, the government owns every dollar that every American earns, and we have arrived at the ultimate moral inversion: Your earnings are not yours by right, but by privilege bestowed on you by government, since the government has first claim on its citizens’ wealth. Put another way, the government, which creates no wealth, is the owner of all of the wealth of the people who do create the wealth, and has first claim on that wealth.

To be sure, the tax code is unfair. It is a tool for politicians to manipulate behavior and favor or harm one constituency or another. The obvious solution to the unfairness is a simple flat tax.

If it ever becomes fully accepted that the government has first claim on the nation’s wealth, by virtue of its taxing authority, we will all in effect become subjects or slaves living at the pleasure of the state—thus establishing a major foundational element of totalitarianism. We will all have lost our property rights to the product of our labor. By logical extension, we will have lost all of our freedoms, because whoever controls the material means of supporting your life has you by the throat—and then all other rights become hollow abstractions.

Statists have a lot of newspeak in their linguistic arsenal. The tax expenditure myth is one of them. Beware.

“In 1927 Justice Oliver Wendell Holmes Jr, a Republican, wrote in a famous dissent,  that ‘taxes are what we pay for a civilized society.’”

All taxes are legalized armed robbery. When all taxation becomes voluntary, we will have arrived at a fully civilized society. But a fully civilized society is a long way off, considering the extensive corruption of power lust and entitlement that permeates the state of today's culture.

That said, it’s true taxation is needed to maintain a civilized society. And to maintain a civilized society, a government is a necessary good. But we can still distinguish between proper and improper taxation. Proper taxation is that which supports the proper function of the government, which is to protect individual rights equally and at all times—rights being guarantees to freedom of action (the rights to free speech, religion, or to earn property by production and trade), not an automatic claim on goods or services that others must be forced to provide (the “rights” to education or healthcare). Proper government functions include the police, the law courts, the military, the patent and copyright offices, legislators’ salaries, etc.

Any taxation that redistributes wealth is illegitimate, as well as any taxation that supports economic regulation and their related agencies. (By “regulation” I mean “the legal imposition or prohibition of courses of private action in which no actual or intended rights-violations are evident,” such as minimum wage laws, the birth control and other insurance mandates, etc. Laws against fraud, extortion, and the like, as well as traffic laws, are not economic regulation.)


The upshot is that any cuts in taxes coupled with cuts in improper government spending are welcome steps in the right direction. Unfortunately, real cuts in taxing and spending are a pipe dream as long as we don’t tackle the moral underpinnings of the welfare state, and begin phasing out spending programs.

Related Reading:

Where Does Valid Law End and Regulation Begin?

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