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Sunday, January 06, 2013

Too Much Taxes, Oh My!

If your approach has been to do all you can to tear down the government, attempting to “starve the beast,” and then you turn around and complain that you’re getting nothing for your tax dollar, you only have yourself to blame.

Now I could be wrong about this, but I suspect you are not opposed to certain government subsidies, such as the public road system.   If you are not so inclined, then please clarify.   But assuming you aren’t opposed, the reasons would be pretty obvious.   If the roads were all privatized, they would undoubtedly be toll roads, and roads in particularly strategic locations could easily cost more than roads in less strategic locations.   And road owners could easily decide to charge based on the type of vehicle—passenger cars for example, could be charged by the passenger, and container trucks by the size and/or weight of the container.   It’s easy to see how this would increase the cost of pretty much anything, and the cost of things in more remote areas could end up higher than those same things in less remote areas.   Certain companies may buy their own roads and exclude their competitors from utilizing them.  Manufacturing would get hit both on the shipping of incoming resources, and the shipping of outgoing products.   Of course, manufacturing could be done in other countries where roads are subsidized by the government so that the only costs the manufacturers have to pay would be the cost to use the American roads to get their products to market, and not have to pay to ship raw materials over them to get to their factories.  And, costs of raw materials in the US to foreign countries would be less competitive with countries who subsidize their roads, because the shipping costs to get materials out of the US would be hampered by the costs of the toll roads.  Consequently, there is a societal benefit to a public system of roads whereby the costs of roads is distributed more evenly in order to equalize the costs of shipping and thereby of goods in general.

Presumably, you wouldn’t expect to get the benefit of public roads for nothing, and that taxes would have to be paid to maintain such a system.   Ultimately, what’s happening here, is you are choosing how you will be taxed—every time you utilize a private road in tolls, or via an income tax to a centralized government managing the creation and maintenance of a public road system.   The idea here is, you are getting something for your taxes, something that you would have to pay for directly otherwise.

Now I can see how one would balk at paying a lot of taxes, yet not getting anything in return.  But if this is occurring, I would say to a large extent that you’ve contributed to that fact.  On one hand, you may not recognize the value of something you actually ARE getting in return for your taxes, and second, if your strategy has been to work to tear down government as undesirable and useless, that you have directly contributed to its inability to provide value in return for taxation.   On one hand, your butts have been defended against terrorists threats (presumably, anyway), since 2001 or so, and that sort of thing is expensive.  If you don’t value this protection, have you been outspoken against it?   Or against the way it’s being paid for (or not-paid for)? 

Another factor is what I’m inclined to call the Rand Free Lunch syndrome.   Now it’s true that it’s not possible to outsource the public road system—you can't use roads in China to ship products from Pittsburgh to San Francisco for example.  Labor on the other hand, can be outsourced.  But it’s important to note that outsourcing labor to China makes use of a labor force that is being subsidized by a socialist system.   And once all American labor has been converted to the cheaper Chinese socialist labor, they will then be in a position to raise the prices of their labor with impunity.  Their laborers have then been educated and are highly productive within their system, but ours have not been as there have been fewer such jobs and less interest in subsidizing education for those laborers.  The long term effect of this is a trend towards a country where all products are sold by Walmart-like importers paying rock-bottom wages, and products being sold to a populace with less and less money to afford them, while the cost of the products go up as the Chinese decide to raise their prices.   And ultimately, this is likely to extend to the realm of international weaponry, a market which the US excels in at the moment, but is now ripe for incursion by the Chinese manufacturing forces.  The cost of the dirt-cheap labor free-lunch is not as free as it might seem, in the long run.

One measure of ethics is to ask the question, would an action still make sense if EVERYBODY did it?

There are in fact, “looters” in this country.  They have looted the US labor force in sending it overseas and taking advantage of OTHER countries labor subsidies and lack of environmental regulations so that they do not have to pay the taxes themselves to support those things.   And at the same time, they’re undermining the US labor force who now can’t compete with the low wages and no longer have sufficient education and/or skills.   It is a free-lunch attitude that is unsustainable and unethical, in that if everyone were to do it, it wouldn’t work, because either we would have to subsidize our labor force too, or they would have to not subsidize theirs, neither of which would result in the same sort of low-cost dynamic we have now.  What we have is an unbalanced short-term "free lunch", that is only going to work for a limited time and for a limited few.   If all you care about is your own short-term profits, it’s a really good deal, but it’s not a good deal for the rest of us, we’re getting cheated in return.

I believe what we are seeing in the economy of the US, is the results of the unsustainability of such free-lunch opportunities-- the unsustainability is finally producing results in the form of the hidden costs to society which are now coming to light.   It's starting to hit companies in their bottom lines, as unemployed workers stop buying products at the level they once did, and employed ones become more cautious.   The ability of the US to compete in the consumer electronics field has unquestionably taken a big hit.  The same technologies that go into consumer electronics go into smart weapons systems, the next generation of which are likely to be Chinese.  This will result in further layoffs of US defense workers as sales of weapons systems to foreign countries fall due to the cheaper prices of the Chinese products.   Are we all just going to be resellers of Chinese goods?   Is that going to be enough?  Or perhaps, do we need to re-think how we evaluate the full cost of doing business in the US?

Also, don’t forget that labor expects to get something for its tax money too.  And if it doesn't get it, it's every bit as interested in revolution as you are as an unhappy too-much-tax paying business owner.  One difference though, is that there's more of them than there are of you.


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