Avoiding the Taxman's "Services"

Last Sunday the Chronicle Tribune reported, in an article about spring property taxes coming due, that Grant County residents will avoid being robbed of $4.2 million thanks to circuit breaker caps. We should all be celebrating this. That's $4.2 million that the residents of Grant County will get to decide how to spend instead of being coerced into handing it over to a wasteful and destructive government. Some of this money will be spent at local businesses. Some of it will be put into savings accounts where it becomes capital to be lent. All of it will be used to improve the lives of the rightful owners of the money, viz., the people who earned it. Surely there can be no downside to this.

Not so fast, says County Council President Jim McWhirt. “As a taxpayer, you’re going to pay less property tax … but it means we may not be able to afford some of the services you expect your government to do. Is that good?” Hmm. It seems Jim thinks you might be happier if he were to spend that money for you. I know he meant for his question to be rhetorical, but I'm going to go ahead and answer him anyway. Yes, it is good that we will be paying less property tax. People who are taxed reflexively understand this. But people on the other side of the table, the Jim McWhirts of the world, think that you should always be forced to give them more money. It's for your own good. I'll assume that McWhirt and the rest of the council are a bunch of sweethearts and only want what is best for us, but if they think government spending is in any way superior to market transactions, then they are misguided to say the least.

In a market transaction, people exchange goods and services that they value inversely. If I go to my local grocer to get a gallon of milk and pay him $4, it's because I value the milk more than I value the $4. He, likewise, values the $4 more than the milk. I say 'thank you' and he responds with "thank you". It's a win-win. Both parties are made better off by trading. But let's say that I don't want to pay for the milk. I now enter the grocery store not with money in my hand, but a loaded gun. I threaten to shoot the grocer if he does not provide me with milk. He complies. No "thank yous" are exchanged. I am made better off, but the grocer has been robbed. He has been made poorer.

But what if I promise to give the milk to the poor, only keeping one glass for my troubles? Is it still robbery? It is. But what if I only did it so I could combine the milk with chocolate (of which I relieved another poor vendor) in order to mix a delicious beverage for the grocer himself? Is it still robbery? It still is. But what if the grocer values the chocolate milk more than the $4 he is out? If that was the case, there would have been no need for the gun. You could have made a voluntary (i.e. market) exchange. No matter how you look at it, when someone uses violence or the threat of violence to abscond with another's property, it is robbery. It's even robbery when Jim McWhirt does it in the name of "government services". And robbery, as we noted earlier, makes society poorer because it's a zero sum game. There's a winner and a loser unlike market transactions which are win-win and build wealth.

I think I have clearly shown why I disapprove of the government's means of collecting money. The obvious objection that people will bring up is that the county government does provide us with many services and that these services must be paid for somehow. So, even if it is technically robbery, we all get to enjoy the roads and such that our collective dollars go to purchase and maintain. These "services" make us better off. But how do we know they make us better off than we would be had we kept our money? On the market, profits signal to entrepreneurs that they are making consumers happy. Losses show that they are failing. Profitable companies grow and prosper while those that continually fail their consumers go bankrupt. But there is no such profit/loss test for government because there are no market prices for their "services" (remember, market prices are determined by voluntary exchanges). Governments don't go away when they lose money. They just borrow or tax more. And often times there is no one offering competing services because the government has outlawed competition in the areas it deals with. All of the incentives to spend wisely, offer improving products, and lower prices (taxes) are absent from government services. On top of that, every dollar the government spends bids away resources, such as labor and capital, from the market where they would be used to increase wealth. That means your tax dollars are in competition with your personal spending dollars, bidding all of your costs higher and higher.

The citizens of Grant County are, without a doubt, better off with that $4.2 million in their hands than if it was in the hands of Jim McWhirt, Wayne Seybold, or Mike Pence. To argue otherwise is to argue that robbery is beneficial to society.