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Are We Slaves? PDF Print E-mail
Written by Bill Pollak ‘09   
Thursday, 16 April 2009 00:00

Bill Pollak ‘09 

Individual rights are not subject to a public vote; a majority has no right to vote away the rights of a minority; the political function of rights is precisely to protect minorities from oppression by majorities and the smallest minority on earth is the individual.” – Ayn Rand

           

For my final column in the Fuqua Times, I will sum up the state of the American political system by asking you a provocative question… Are you a slave?  Admittedly this question sounds foolish on the surface. We all have relative freedom to move about to different states and work different jobs.  We are not slaves in the sense that the blacks in the South were slaves, but I would contend that in a very real sense we are slaves to the government in all its manifestations. 

A quick Google search will result in numerous results for slaves who simply paid their masters a sum every month and were otherwise free to seek their own employment and keep the difference.  Are we that different?  For those of you who will be making more than $200,000 in New York (which as a good capitalist I hope is a lot of you), your marginal tax rate will be 62.2% after Mr. Obama’s coming income and payroll tax increases. Oh, by the way, that does not include road tolls, sales, property, alcohol, tobacco, phone, gas, or corporate taxes! If slavery is when one man owns another’s labor, does not the government owning 60% of your labor make you 60% enslaved?

Well certainly if we give up control of that much of our money, we can pretty much act as we please as long as we don’t hurt other people right?  Oh no, we are also regulated to an extent that that almost no facet of human life is left unmarred by government intrusion.  The costs to Americans of complying with government’s rules amount to some $2 Trillion per year (nearly $7,000 per citizen).  It is so bad that if you wanted to read the legislation that is imposed on us annually, it would be a full time job for a third of the year.

How did a nation of people who rebelled against Britain over the equivalent of a 3% tax rate end up surrendering so much of our financial and personal liberty to ever-growing beasts in Washington, Raleigh, Albany and elsewhere?  There are a number of answers, but one of them is the human tendency to not care about what does not directly affect us.  Government is very good at denying the rights of a small group of people, knowing that the rest of us will not care, or will even be cheerleaders.  Democrats have used the force of government to deny property rights of smokers.  The 80% of people who don’t smoke will not stand up for the rights of those who do smoke to do so even on their own property, will they?  If you can’t decide for yourself what to do with your property, do you really own it?  Republicans are just as guilty.  They love to demonize and borderline persecute illegal immigrants as criminals.  Never mind that immigrants are just responding to market forces while providing incredibly valuable services for our economy, it’s just too easy to rile up people by telling them “the Mexicans are screwing you”.  In some sense the whole problem reminds me of what Father Niemoller said about the Nazis, if you will not stand up when the government comes for the smokers, Mexicans, Muslims, Mormons, or AIG employees, who will be left to stand up for you?

Another tool the government uses to divide and enslave us is to first insert itself “benevolently” in a situation and then use its interest in that facet of our life to control that situation.  One example of this is education.  Every child in this country is forced to receive “FREE!” education at the hands of the government.  We spend an incredible $10,000 as a society in subsidizing this.  While I do not doubt the good intentions of those who 100 years ago wanted to give poor kids a chance, the schools have devolved into a combination of indoctrination in what the bureaucrats want kids to know and a way to spread the influence of government unions.  When nationwide we have a 30+% dropout rate and many of those who do graduate can barely read, we need to wake up.  The government is a failure.  We let them run the system and they screwed it up. Parents know the system is horrible, and blame teachers, teachers blame parents, and though both have responsibility, the problem is the system. Our society is being destroyed by these schools. We don’t need a smarter plan, a bigger Department of Education or more “No Child Left Behind”; we simply need to eliminate government involvement. 

Similarly, at some point we allowed the government to decide what a marriage was.  This is a really odd situation.  Think about it, your marriage is an agreement between you, your spouse and the State.  People gladly accept the tax deductions, but what about divorce?  How many lives have been destroyed by a crappy custody decision by some bureaucrat in a black robe?  And does anyone really think that gay marriage would be a divisive issue if the state weren’t involved?  I’m not suggesting that militant gay activists and Pat Robertson would be best friends, but I am saying the more that governments control benefits and financial incentives, the greater the conflict between people of different ideologies.

I know most readers do not agree with these thoughts, but I do believe that we all have a point where we know the state has gone too far.  For me, that point was a long time ago, but I would urge you to think about what your limits are, and don’t back down, or these people will keep taking more and more of our lives until we’re not just 60% slaves, we’re 100% slaves.

Last Updated on Saturday, 04 July 2009 00:52
 
From Taxes to Death PDF Print E-mail
Written by Vishal Gupta '10   
Thursday, 16 April 2009 00:00

Vishal Gupta Class of 2010

 
 

 

 

 

 

Over the weekend, as I was pouring hours into getting my federal and 2 state tax returns done, I couldn’t help but think that some things never change. Despite all of the talk of change and defending American liberties over the past decade, most Americans have little freedom when it comes to taxes. As the saying goes, “The only guarantees in life are taxes and death”. Although inevitable, couldn’t the tax code be simplified and made less painful. First of all, why does every American have to file federal and state taxes considering the median family income in 2007 was only $50,230(according to the Census Bureau)?  Over 50 million families could easily save over 8-10 hours per year by not having to file taxes under a simplified system. The tax system as it costs Americans roughly 15-22 cents in compliance costs for every dollar that goes to the government. Overall, individuals and business spend about 6 billion hours compiling their taxes annually.

            Besides the lost time and the headache of the filing process, the complexity and vagaries of the tax code present the biggest challenge to filers, tax preparers, lawyers, and public policy makers. Consider how large the tax code itself has become:

Figure 1 

Taxes such the flat (as a percentage) social security tax end up burdening lower income individuals and are largely irrelevant for the rich (> $1M annually). Therefore, the overall tax code is neither progressive nor regressive but rather equally painful for most. Advocates for a flat tax at least recognize the administrative savings inherent in such an arrangement. I’m not arguing for such a drastic change to the system, just any pragmatic changes which will simplify the system for the majority of filers who don’t manage complex transactions all day.

            Taxes today constitute a major obstacle to both growth and investment. They neither encourage saving or meaningful investment in infrastructure, education, or energy. The Fed has tried to salvage the financial system and the economy more broadly through lowering of interest rates and quantitative easing. I would argue that an equally effective lever would have been a fiscal one with a targeted tax cut at the middle class. By lowering marginal tax rates in the middle in the belly of the beast, disposable income, spending, and liquidity would return immediately. The tax revenue loss would be more than offset by the gains in transaction volume. In economic terms, money velocity growth would displace the need for growth in the monetary base. Whether you believe that this approach would be revenue neutral or not, it’s probably worth a try in these desperate times. The price of a prolonged recession or even a global depression is too steep to take any chances. Ultimately, considering how efficient the government is at allocating capital and picking positive NPV projects, I would rather have everyone keep more of their own dollars. The leakages to the government have created most of the structural and debt overhang problems in our economy. The only way to force these positive changes is to be vigilant against tax increases and increased government spending. Lately, both parties have demonstrated skill at only one thing, increasing government presence and bureaucracy in every aspect of American life. 

Last Updated on Saturday, 04 July 2009 00:52
 
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