Tag Archives: state of the union address

What is Your Fair Share?

“For were the impulses of conscience clear, uniform, and irresistibly obeyed, man would need no other lawgiver; but that not being the case, he finds it necessary to surrender up a part of his property to furnish means for the protection of the rest…”

– Thomas Paine, Common Sense (1776)

There were not many surprises in President Obama’s 2012 state of the union address on Tuesday. He touted what he claims are the accomplishments of his administration and pushed his left-leaning economic agenda. For the president, all economic growth has its roots in some sort of government intervention, including “help financing a new plant, equipment, or training for new workers,” giving “community colleges the resources they need to become community career centers,” or trying to “spur energy innovation with new incentives.” Of course, further expanding a government that already spends about 50% more than it collects in taxes can only be accomplished one way – by collecting a lot more taxes.

To this end, the president resorted to the perennial liberal/progressive mantra that everyone “pay their fair share.” Obama used this term three times during the speech in regard to taxes. As even many of the Republican presidential candidates seem to buy into it, the president was also unable to resist the urge to promote the latest left-wing myth that millionaires like Mitt Romney pay less in taxes than their secretaries. This is complete nonsense, of course, but it is effective in eliciting the appropriate outrage from people who don’t stop to do either some simple math or even a little critical thinking.

For the president, there doesn’t seem to be a ceiling on what anyone’s fair share might be. However, he does have a clearly defined floor. “If you make more than $1 million a year, you should not pay less than 30 percent in taxes.” Exactly why that number is “fair” or even the millionaire’s “share” is somewhat difficult to determine. Neither does Obama answer the question that should logically follow. If you make under $1 million per year, what is your fair share in taxes?

Now, in any other situation where a group of people agrees to pool its money to buy something, this is a very easy question to answer. If you and three friends decide to go in on a large pizza, each of you will pay 1/4 of the cost. Assuming it is a typical pie, it will be cut into eight pieces and each of you will eat two. Thus, everyone has received an equal amount of the pizza and each has paid his fair share of the cost.

Of course, before anyone determines your fair share of the cost, you would be asked if you want pizza in the first place. In all such arrangements between human beings, other than government, you have a choice of whether you want to buy or not. Perhaps you’d like to eat something else. Perhaps you’re not hungry. You can always allow the other three to buy pizza and provide for your own meal yourself.

Not so with government. Not only can the other three take a vote and force you to buy part of this pizza, but they add insult to injury by proclaiming that their vote represented your consent to buy it. With this dubious consent in hand, they then decide what your fair share of the cost of the pizza will be, regardless of how the slices are distributed. If you have acquired too much wealth, even honestly, then you might find yourself paying for 3/4 of the pizza and only getting one slice in return. Once voluntary consent is eliminated and force is put in its place, it becomes difficult to use words like “fair” and “equitable” without committing grave offenses against the language.

Putting that aside for the moment, let’s assume that 315 million people have actually all agreed to constitute a government and pool their money to pay for its services. Before determining what anyone’s fair share of the cost would be, we first have to determine what services the government can offer. It would not make any sense for the government to offer services that only benefit one or two people, because all 315 million are paying. No, the only legitimate services that the government could offer would be those that contributed to the “general welfare.”

This widely abused term is not anywhere near as mysterious as it is made out to be. Promoting the general welfare is offering only those services that benefit every member of society equally. For example, if the government devotes resources to a military establishment to protect the nation’s borders, it is promoting the general welfare. Regardless of how effective the service might be, every member of society within the borders is benefitting equally from it. From the Wall Street financier to the general contractor to the grocery clerk to the homeless man, all are receiving equal protection from foreign invaders. Thus, a defensive military establishment is a service that promotes the general welfare and therefore could be offered fairly under such an arrangement.

Similarly, a system of law enforcement and courts would also promote the general welfare. If the person or property of one member of society were invaded by another, then employees of this agency would investigate the incident, determine if a tort or crime had been committed, and make a determination on what penalty or restitution should be paid by the defendant. This, too, would benefit all members of the society equally. Whether you were a Wall Street financier whose partner had embezzled millions or a taxi driver whose modest home had been burglarized, you are equally protected by laws against theft.

Notice also that the cost of providing these services is the same for each member of society. Obviously, it costs no more for an army to defend the financier from an invading army than it does to defend the taxi driver. The army defends against the invader for all within the borders at one cost. Similarly, it costs no more to provide a police officer, a judge, a jury, etc. for the financier than it does for the taxi driver. The only exception is defense attorney, which is provided for a defendant who cannot afford one, but this is a minute percentage of the entire cost.

In short, any defense of life, liberty, and property, whether from foreign invasion or aggression by another member of society, is a service that benefits the general welfare. It benefits all members of society equally and costs relatively the same to provide to all members of society.

Let us now consider some services that the government offers that do not promote the general welfare. Healthcare is obviously one. First, all members of society do not benefit equally when the govenrment provides healthcare. For example, Medicare only benefits people over 65 yeras of age and disabled people under 65. Not only does the program not benefit all members of society equally, but it actually does not benefit those paying for it at all, while those receiving the benefits (those over 65 and the disabled) do not pay at all. Recall the pizza example. Imagine if you had to pay for a whole pizza that your three friends ate, and then had to pay additional monies to provide for your own meal. Medicare, Medicaid, or other government programs for specific groups are really no different.

In addition, government medical care can never cost the same to provide to all members of society, as security services do. Some people will be sicker than others, either through misfortune or their own lifestyle choices. Some will need surgeries or chemotherapy or other expensive care. Some will need relatively little care. It is not an exaggeration to say that there may be 315 million different costs to provide healthcare to 315 million different people.

Education is another service that does not promote the general welfare. When the govenrment provides education, it is of absolutely no benefit to anyone that is not in school or does not have children in school. Neither does it benefit parents who homeschool their children or enroll them in private schools or childless adults who all must pay for government education. Some of the people who benefit do pay part of the expense, but obviously this does not constitute “fairness.” It is no different than if four friends all paid for 1/4 of the pizza, but two of them ate it all. Certainly, the other two had no “fair share” for any of the pizza at all. As with healthcare, the cost of education is also going to be different for different people. An education in medicine has a different cost than an education in engineering or art.

In looking at the federal government’s budget, one can see that the overwhelming majority of the money spent is not spent for the general welfare. Almost all of it is collected from one group of people and spent for the benefit of others. The only services provided by the federal government that truly promote the general welfare are those that concern defense of the borders and defense of person and property related to interstate commerce. At the state level, only defense of person and property within the state promotes the general welfare. All other services represent a forced redistribution of wealth from one person or group to another. When anyone other than the government engages in a “forced redistribution of wealth,” we call it “armed robbery.”

It should also be noted that even the “Defense” portion of the federal budget largely does not promote the general welfare. Only that portion necessary to defend U.S. citizens from aggression by foreign nations does. Those expenditures related to defending people in other countries or which are unnecessary for security not only do not promote the general welfare, they do not benefit anyone within the United States at all – except for those military contractors and financiers that are fortunate enough to profit from these activities.

There is also frequent confusion about government services commonly referred to as “infrastructure.” It is argued by some that if the government builds a road that is accessible to everyone, it promotes the general welfare. However, this argument does not hold up to scrutiny. If federal money is used to build a light rail system in Florida, it is going to benefit people who live or travel frequently in Florida much more than people who do not. Certainly, a citizen in California or Montana is unlikely to ever even see that railroad, much less benefit from it equally. Who would not agree that his fair share of this railroad is zero?

Even at the local level, a road or a bridge does not benefit every member of society equally. The local businessman whose products are more cheaply transported is going to benefit far more than the occasional traveler that might use the road for convenience. Yet, when the government builds the road, both are forced to pay equally. Furthermore, since the businessman is running heavier vehicles over the road with much greater frequency than the occasional traveler, it costs more in maintenance to provide this service to the businessman than to others. Obviously, the road or bridge does not promote the general welfare even at the local level.

So, what is your fair share in taxes? The answer is that you owe an equal share of those services provided by the government that promote the general welfare. Those services benefit you and everyone else equally. However, examination of any government budget, at the federal, state, or local level demonstrates that these services are now a tiny fraction of overall spending. A quick look at Florida’s budget summary reveals that about 8.7% of government spending promotes the general welfare. That $4.9 million in expense should be born by every citizen of Florida equally. The other $51.4 million does not promote the general welfare and should not be provided by the government at all.

An examination of the federal government’s budget for 2012 yields similar results. Once you subtract services that do no promote the general welfare, like education, healthcare, social security, and that part of the defense budget that is devoted to purposes other than protecting U.S. citizens from foreign aggression, you are left with a tiny fraction of overall spending.

For services that promote the general welfare, there is a finite cost. It does not vary depending upon how productive you are, so your fair share of that cost certainly can’t be a percentage of your income. Logically, the way to determine your fair share is to divide the total cost of services that promote the general welfare by the total population. If you have no dependents, then the quotient is your fair share. If you have dependents, then you simply multiply that quotient by the sum of your dependents and you. When you do the math, you’ll find that your fair share in taxes is a very small amount. As Thomas Paine pointed out, it is that tiny portion of your property necessary “to furnish means for the protection of the rest.” It would be easily paid by even a person of modest income. It would not require an income tax, as history before 1913 demonstrates.

For those services that the government provides to other people, your fair share is zero. However, the government routinely forces some people to pay more than their fair share and allows others to pay nothing at all. It generally collects the most in taxes from people who receive the least in benefits, which is the predictable result of offering services that do not promote the general welfare. Now, President Obama wants some people to pay even more. He and the Congress have the power, but that does not make it right. And please, President Obama, don’t insult our intelligence by calling it “fair.”

Tom Mullen is the author of A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

The True State of the Union: We Have No Rights Whatsoever

2010_State_of_the_UnionIt has been almost a week since President Obama gave his first State of the Union address, and it has been analyzed from the left, right, center, front, and back. Of course, the speech is really about the performance of the federal government, particularly its wonderful accomplishments under the leadership of the sitting president. This is not peculiar to the Obama presidency. As far back as Jefferson, presidents have used the Constitutionally-mandated stump speech to do a little self-promotion, although what they promote has certainly changed quite dramatically.

However, if the speech is supposed to reflect the accomplishments of the federal government, then we should expect that it will contain specifics about how that government has fulfilled its purpose, which is, as we all know, to secure our rights. At least that’s what our founding document tells us. Therefore, if a president is going to do a little bragging about what a great job he has done, it would be logical to assume that we would hear particulars about the way in which he has secured our rights. Logic, however, has little to do with the machinations of leviathan.

In fairness, President Obama did begin his speech with a few remarks about the actual state of our country – a state of economic devastation and unending war. The fact that both of these afflictions have been caused wholly by our federal government is something that seems to have gone right by him, although he is not unique in that respect, either. Having reminded us about how bad things are, he dutifully lays as much blame as possible on the president that preceded him (another time-honored tradition when succeeding a president of the opposing party). He then moves right into trumpeting his accomplishments.

The president explains how he hit the ground running after taking over during the financial crisis, which began during the last year of the Bush administration. He takes pride in the fact that he supported the bank bailouts over the wishes of the American people, because when he ran for president, he “promised he wouldn’t just do what was popular,” he would do “what was necessary.” I don’t remember that particular campaign promise, although I do remember him promising to “preserve, protect, and defend the Constitution of the United States” or something to that effect. I suppose you can’t expect him to keep them all.

President Obama justifies his first initiative as president as follows:

“And if we had allowed the meltdown of the financial system, unemployment might be double what it is today. More businesses would certainly have closed. More homes would have surely been lost.”

Perhaps the president is correct on this. Perhaps he is not. However, there is one consideration that seems wholly missing from his thought process. Do the people whose money was taken to “stabilize the financial system” have any rights? By what authority was their money confiscated, even if it were for “the good of all?” Majority vote?

The president next goes on to extol the virtues of the first policy that was wholly his own. He says that his administration “extended or increased unemployment benefits for more than 18 million Americans; made health insurance 65 percent cheaper for families who get their coverage through COBRA; and passed 25 different tax cuts… As a result, millions of Americans had more to spend on gas and food and other necessities, all of which helped businesses keep more workers. And we haven’t raised income taxes by a single dime on a single person. Not a single dime.”

This seems to be a mixed message. The part about extending unemployment benefits and making health insurance cheaper seems like more wealth redistribution. However, he also mentions tax cuts that saved jobs and let people keep more of their own money. One might have been led to believe that he actually secured the right to property here, at least for some of his constituents. Then came the punch line.

“The plan that has made all of this possible, from the tax cuts to the jobs, is the Recovery Act. That’s right -– the Recovery Act, also known as the stimulus bill. Economists on the left and the right say this bill has helped save jobs and avert disaster. But you don’t have to take their word for it. Talk to the small business in Phoenix that will triple its workforce because of the Recovery Act. Talk to the window manufacturer in Philadelphia who said he used to be skeptical about the Recovery Act, until he had to add two more work shifts just because of the business it created. Talk to the single teacher raising two kids who was told by her principal in the last week of school that because of the Recovery Act, she wouldn’t be laid off after all.”

It is ironic that one of the examples that the president cites is a window manufacturer. Those few lucid economists who are not among those “on the left and the right” who agree wholeheartedly with the stimulus bill certainly would have been unable to avoid recalling Frederic Bastiat’s “broken window fallacy.” It is the absurd reasoning that Bastiat exposes in his famous essay, “What is Seen and What is Not Seen,” that underlies the entire “stimulus” strategy. Occasionally, this has been pointed out in public debates over these programs. However, there is one question that has not even been asked by President Obama’s most vitriolic Republican opponents. Do the people who were forced to fund the Recovery Act have rights?

President Obama implies that his wonderful largesse was accomplished without taxing anyone, but this is absurd. It may be true that he has not had a tax increase passed in the Congress, but the funding for the Recovery Act can only come from one place. For the portion that was borrowed by the U.S. government from other nations, that money will eventually have to be paid back. The government only has one official source of revenue – taxation. The fact that those who will pay the taxes to underwrite the Recovery Act may not be born yet (although I don’t personally believe that Washington has that much time left) doesn’t change the fact that they will be forced to pay it back.

There is also an “unofficial” source of revenue for the government, and that is inflation. For the portion of the Recovery Act debt that the Federal Reserve merely monetizes, it is no less taxation than is an appropriation from the Treasury. It is merely a more insidious form of taxation, one that does not look its victim in the eye, but rather steals from him silently through depreciation of a currency that he is forced to use by the government. Whether by official or unofficial means, there are individuals whose money will be confiscated by the government so that others may keep their jobs. Again, I ask, do those individuals have rights?

It should not go without mention exactly who these people are whose jobs have been saved by the Recovery Act. According to the president, “there are about two million Americans working right now who would otherwise be unemployed. Two hundred thousand work in construction and clean energy; 300,000 are teachers and other education workers. Tens of thousands are cops, firefighters, correctional officers, first responders. And we’re on track to add another one and a half million jobs to this total by the end of the year.”

Is there anyone among these two million that are not government employees? Perhaps the construction workers, although I’d bet they are working solely on government contracts. In any case, they are all on the receiving end of the taxation, necessitating that others must be taken from in order for them to receive.

The whole concept of the government “saving or creating jobs” is one whose injustice seems to elude everyone. That is probably because a century of “progressive” ideas has completely befuddled us about what a job really is. A job is a contract between a buyer and a seller. The employee is the seller, who sells his services to an employer for a mutually agreed upon price – his wages. This contract is one that both parties enter into voluntarily. The employer purchases the services because he is willing and able to do so. The employee sells for precisely the same reasons. Each has a right not to enter into the agreement, or to terminate it anytime he wishes.

However, when the government “saves or creates jobs,” it completely overrides the voluntary nature of this arrangement. If an employer is no longer willing or able to continue to purchase the services of an employee, the government has only one means at its disposal to change that outcome: brute force. It uses this force to confiscate the property of other people and thereby force them to purchase the services of the employee, since the employer is no longer willing or able to do so himself. The government claims it has saved a job, but it certainly has not secured any rights. In fact, it has acted counter to its purpose. It has destroyed the rights that it exists to protect.

It is the same evil at work in the president’s call for “health care reform.” As part of his plans to “improve the system,” the government will not only annihilate the right of property but liberty as well. While taxing some in order to pay the doctor bills of others, the federal government will ensure that no one can even conscientiously object. Every American will be required to purchase insurance from one of the government’s pet corporations, regardless of whether they want to or not. This amounts to a mandatory fee paid to the government merely for the privilege of being alive. Once the right to property is destroyed, the rights to liberty and even to life are destroyed with them.

Without repeating the analysis for every program that the president described, they all rest upon the same logic. There is some mysterious entity called “society” whose needs outweigh the rights of every individual that comprises it. In fact, it is apparent from the president’s speech (and those of most of his predecessors) that the federal government recognizes no rights of any individual whatsoever. Sadly, there are not many among the citizenry who think any differently. So long as representatives have been democratically elected, their power knows no bounds and recognizes no rights.

America was founded upon exactly the opposite idea. The reason that the U.S Constitution guarantees every American “a Republican form of government,” rather than a democratic one, is precisely because its framers believed that individual rights cannot be voted away. We cannot vote ourselves a right to other people’s property, not even to save millions of jobs (although it is really not possible to do so anyway). We cannot vote away another’s liberty, not even to lower health care costs for those who cannot afford it (although this will not work either). This was the central principle upon which our nation was founded – that we are endowed by our creator with unalienable rights. A pure democracy does not recognize these rights.

Progressives promote the idea that “taxation without representation” was the chief injustice that led to the American Revolution. This is convenient to their agenda, because they go on to justify any tax levied by a democratically-elected body on the grounds that those being taxed were represented in that body.

Of course, this begs the question, “Why did the founders specifically instruct Benjamin Franklin not to under any circumstances accept an offer of representation for the colonies in the British parliament?” Perhaps we should be so wise. Secession anyone?

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.