Today’s edition of the Kansas Jackass blog has a post written by Jason Croucher that criticizes Americans For Prosperity because the group doesn’t like taxes.
That’s not quite accurate, as Croucher himself says he doesn’t like paying taxes. Instead, the post seems to argue that we have to pay taxes because they’re there, and we don’t know whether they’re too high, and anyway, we can’t identify and agree on what is waste, so let’s just pay. Something like this, anyway. But there are a few problems with this post that deserve discussion.
He likens paying his cable television bill to paying taxes. This analogy is false on several levels.
First, subscribing to cable television is a voluntary act. A company offers a service, a person decides to buy, and therefore becomes a customer. The customer — and the company, too — can decide to sever the relationship whenever and for whatever reason the parties have agreed to.
That’s not the way taxes work. There’s nothing voluntary about the relationship between state and taxpayer.
Then he says that he doesn’t know whether his cable bill and taxes are too high — his emotions make him feel like they are — and how there’s no rational reason for thinking they should or could cost less.
As it turns out, there is a rational reason why a cable bill is what it is: competition provided through markets. It hasn’t been this way until recently, but now you can get television service in several ways besides free over-the-air broadcasts: cable TV, satellite TV, and in many areas, TV provided by the telephone company. These three service providers compete with each other on the basis of price and service. (This doesn’t include services like hulu that show television programs over the Internet.)
For most of the things that government does and taxes us to pay for, government is the sole source. Even for areas where there are alternatives, such as private schools, many people can’t afford to pay their taxes and private school tuition at the same time, so government is almost like the sole source. And even if a family decides not to use the government schools, they still have to pay the same taxes just as through they used them. Companies operating in markets can’t compel their customers to do that.
Furthermore, competition provides a built-in incentive to control waste, something that Croucher seems to think is desirable to control in government, if we could come to agreement as to the definition of waste.
In private industry, the profit and loss system provides a powerful incentive to control waste. At the minimum, being efficient while satisfying customer needs leads to greater profits. Its strongest incentive, however, is survival: those firms that are wasteful die.
What happens to wasteful government programs? President Obama campaigned on ending wasteful earmarks, but signed a bill containing 8,500 such earmarks. He did say this is the “end to the old way of doing business,” but I don’t think anyone believes him. Or ask George Will about the mohair subsidy.
The automatic pruning of inefficient or wasteful companies through markets and the profit and loss system saves consumers from having to do with a grocery store what Croucher wants us to do with Kansas government: come up with a list of “waste.”
So government, as we see, is largely immune from the pressures of a marketplace. So Croucher is correct on one respect: we don’t know what our taxes should be.
But we can be positive that they’re too high.
Leave a Reply