journal . Ben Sommer


October 27, 2004

Massachusetts, Kick the Tax Habit

The great cultural critic H. L. Mencken once said "Every election is a sort of advance auction sale of stolen goods." How true. One can picture candidates as auctioneers, taking bids from special interests and their voting consituents on the property and wealth of their fellow citizens.

I know that these days, with the income tax a fixture of political life, it may seem extreme to think of it in terms of confiscated property, but that's exactly what it is. The only thing voluntary about Massachusetts' income tax these days is the novel mechanism, that debuted on last year's return, of giving taxpayers the option of paying the higher (and formerly statutory) 5.8% rate, rather than the current 5.3% rate. Not surprisingly, native son John Kerry exposed a bit of his liberal hypocrisy by calling for higher federal income taxes on the campaign stump, while quietly opting for the lower rate on his own state return.

Consider the fight this year over Governor Romney's efforts to complete the voter-mandated roll back of the state income tax from 5.85% to 5%. This is something state legislators, led by late House Speaker and Chief Oligarch Tom Finneran, have willfully refused to do despite direct orders from the voters in a 2000 referendum.

Romney has been busy campaigning for a raft of new Republican candidates for statewide office. Democratic lawmakers, by their obstructionist, anti-democratic refusal to obey voters' wishes on the tax cut may have unwittingly handed their opponents a potent weapon that will come back to wound them this tuesday. Though a Republican sweep is unlikely, there are several vulnerable Democratic encumbents. Even a few upsets would send a strong message to Beacon Hill.

Despite our unfortunate reputation as the 'Commonwealth of Tax-achusetts', our state does have a traditional resistance to big government and its attendant inefficiency and corruption. We are the birthplace of that great middle-class tax revolt,commonly known as the American Revolution. We are the descendants of Daniel Shays and his farmer's revolt against high property tax. We are the citizens who in 2002 nearly voted away the state income tax entirely.

But to listen to the elites at the Boston Globe Editorial Board, the Massachusetts Taxpayers Foundation, and other tax-friendly organizations, we the poeple don't know what's good for us. We don't fully appreciate the failing schools and ineptly managed public works (e.g. the Big Dig) that our taxes so amply fund. We don't understand why big union payouts for town employees require some of the steepest property tax increases in decades. And most importantly, we are selfish and inhumane if we dare challenge the state's monopoly on education by calling for more school choice and accountability.

Its a proven fact that taxpayers will always vote for smaller government. It happened in here in 2000, in Tennesse in 2001, in Alabama in 2003, and it will continue to happen throughout the country until lawmakers get the message: 'Stop auctioning off our stolen goods".

October 21, 2004

No Flu Shots? Blame Government

Yes, its that time again. Flu Season. Since the pandemic of 1918 killed hundreds of thousands of Americans and millions in Europe (possibly tipping victory toward the allies in WWI) keeping the inlfuenza virus in check has ranked near the top of public health concerns. Thankfully, doctors have had steadily greater success preventing another outbreak. Still, an average 36,000 Americans die of the flu each year, and it remains a leading cause of death. A regular flu shot for at-risk people could help end this.

But this year there's a vaccine shortage and (surprise) a panic. And as free-market economist Thomas Sowell once said "Whenever I hear the word 'shortage' I wait for the other shoe to drop. That other shoe is usually 'price control.'

And who controls prices? Well, in the free market consumers and producers "control" prices, or rather, arrive at mutually advantageous prices through an elaborate dance performed on the vast stage that is the American economy. But unfortunately, this time we're talking about price controls imposed by the government.

In 1994 President Bill Clinton signed into law a price freeze for all children's vaccines to be bought and distributed by the Centers for Disease Control. Needless to say, after 10 years of inflation, increasing health care costs that have outpaced inflation, and the appearance of more virulent strains of inlfuenza requiring new research to fight, the government now finds itself with few manufacturers interested in selling it vaccines at 1994 prices.

It's the simple A-B-Cs of economics - supply and demand - that explains this shortage. Government enforces a price ceiling on a vaccine, reducing manufacturers' profit incentive to pruduce it, and simultaneously consumers perceive a new bargain and think to themselves "Now that a flu shot costs so little, there's no reason I shouldn't get one!" An artificial increase in demand and reduction in supply results and we get our predictable shortage, waiting lists, and panic.

One would think that since this scenario has played out literally thousands of times over the years government would have learned its lesson. But not so. We are already hearing complaints about "greedy" drug companies and calls from beaurocrats to further nationalize health services. But moving in this direction would only result in longer waiting lines for the medicines we need, whose availability government intervention caused to dry up in the first place. In the extreme case, we'd end up like Soviet Russia, with its long lines for everything from toilet paper to aspirin. But even in the milder case, we'd likely have many more yearly deaths from the flu, simply because a vaccine wasn't readily available. Ask yourself: would you rather be a few dollars poorer and your child's or elderly parent's health better secured this winter, or take your chances in line for a "cheap shot" from the government?

October 6, 2004

The ABCs of Tax Cuts

To be a casual observer of this year's election rhetoric is a dangerous thing. Dangerous because marginally interested voters don't have the time, interest level, or inclination to cut through the spin from our major media outlets like NPR, CBS, New York Times, and Boston Globe. Thus when a headline like "President Bush's Cuts Tax For Rich" gets repeated often enough, it seaps unchallenged into voters' unconscious. They think: "Yeah, Bush ain't cutting my tax."

This happened to me. As one not predisposed to take anything from the media at face value, even I found myself believing that I was left out of the several rounds of tax cuts passed these last few years. A wake-up call came from an HR Block mailing to my home last March, which trumpeted the new Federal Income Tax rates for 2003, comparing them to the previous years'. To my surprise my marginal rate had fallen from 28% in 2000 to 25% in 2003. Sure, the top bracket fell from 40% to 35%, a full two points farther than mine - but those high-flyers are already paying way more than me, in dollar and percentage terms, and they deserve to keep more of what they earn, too.

So, as an inveterate tax hater, I was elated. I wasn't being left out at all! Who could have could have brainwashed me to think otherwise? Why, that old boogey man, Liberal Media. The truly shrill Paul Krugman of The New York Times (economist and occasional punching bag to Bill O'Reilly) is so jerky-kneed that he cannot write the word 'Bush' without spasms of disgust and many repetitions of 'Greedy Liar!'. The Boston Globe's Robert Kuttner writes his weekly screeds about Republican scams and duplicity, about how conservatives in Congress are stealing everyone's free lunch and giving it to their rich cronies. The most obscene assertion came from Kuttner last summer, when his response to the Republican argument that families who paid no income tax had not earned tax relief was: "Of course, these families do pay sales taxes, excise taxes, and property taxes."

What Kuttner would like, I'm sure, is a hand-out for the poor. That is, free money. So for him and other self-hating tax-payers out there, here's how a tax cut works:

You go to lunch with a friend to your regular joint. Its your treat. Your plate cost $20, your friend's cost $6. After you pay the bill, the owner comes out and says, "You know guys, you're such regulars - this time its on me. Here's your money back". You take your $26, but your friend says: "Hold on. My plate cost $6. Where's my refund?" You say, "Excuse me, but I paid for your plate." Your friend says, "But I want $6!".

This is how a tax cut works: free-lunchers don't get refunds. Unfortunately, not only do some of our ungrateful fellow citizens want a free lunch and a refund, they're happy to eat the rich any way they can.

October 1, 2004

Who's Your Daddy?

My first child, seven month old Samuel, is just starting to flap his lips and make primitive vocal noises, his first baby steps toward speech. His first words? 'Dadada'. Daddy's little boy! OK, I suppose he doesn't really know what he's saying, but he soon will. And the day that he does understand and cryies out 'Dada' will probably rank as one of my happiest. Hopefully, I'll be up to the task of being his "Big Daddy", protecting him from injury and illness, providing him the food and clothing that he needs, helping him weather the storms in this often cruel and harsh world.

From the way some adults talk of politics these days, one wonders if they aren't also struggling to form the word for their own hoped-for parental savior: 'G-G-G-Government'. Retirees are worried about the future of their Social Security "allowances". Medicare recipients fret over the "generosity" of health benefits. The out-of-work look to Washington to extend their unemployment "handouts". Prudish parents demand that the FCC fine "naughty" broadcasters for saying "peepee" and "poopoo" on prime time TV.

There's a new word for this social phenomenon: paternalism. It came to my attention through author Albert Piacente, who's been making rounds on the rubbber chicken circuit in New England promoting a book: "Complete The American Revolution!" To Piacente, our attitude toward government is like that of a child to his father. Whenever a new need is perceived or a social crisis arises, voters - Republican and Democrat - turn to government to have it solved. Politicians respond by delivering their rhetoric in soothing, reassuring - or threatening - tones, as would a father. And like a father, they pin their careers on "bringing home the bacon" to their consituents.

Of course, the notion that government ought to be in the business - not just of protecting rights - but of serving every need of 'The People' is quite old. Abraham Lincoln said "Government should do for the people what they can't do for themselves". His progressive Republican Party, ancestor of today's Democratic party, were the original boosters of big national government. His progressive descendents Woodrow Wilson, FDR, and Lyndon Johnson amplified Lincoln's message and put it into practice by ratcheting up taxation and multiplying government services.

In this year's presidential election, the flaming rhetoric from both sides can be summed up simply: "I'm your Daddy!". Bush stands with a firm upper lip, and swaggers as he says "I'll protect you". Kerry chastises "We must play nice with the world!", and empathizes "Mean Mr. Bush stole your lunch money and gave it to his rich friends". All that's left to decide for the lone undecided voter is "Who's your Daddy?".

We citizens deserve better than to be treated like children, though in the end we must blame ourselves, for we're the ones reverting to childish hopes that a "Daddy" in shining armor will fix things for us.