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Taxes are the price we pay for…

In December 2010, The New York Times published a letter by Liane Ellison Norman which reminded us, in response to various statements from politicians of the time criticizing taxation as something evil, that taxes are what we pay for the things that government does for us.  To support that view, she used a variety of analogies from the free market of things that we willingly pay for and then provided a long list of items – a carefully curated list of things most people would agree are worthwhile — that the government must spend money on.

I have no moral objection to paying taxes (though I admit it is unpleasant).  Yes, there are things that government must do; and yes, we need to pay for them.

But Ms. Norman missed the essential difference between the market and government: the things I pay for in the market are, indeed, things I have personally decided are worth my gold; whereas, the things I pay for in taxes may be things I not only don’t value but actively object to.  Even in the market, we may resent the price someone asks us to pay for something we want; how much more, then, might we resent the price we are asked to pay for things we would really rather do without?

I wrote this in response to her letter, but it was not published.

17 December 2010

Letter writer Liane Ellison Norman (17 Dec) asserts that “Our taxes are nothing more or less than the prices we pay for what we want.”  To that I must reply, “Yes, but….”

Yes, taxes are the price we pay for the services government provides and, if we want government to provide services, we need to be willing to pay the taxes that support them.

But, unlike in a market where we actually do choose directly and for ourselves what is worth paying for and what to abjure, what we get from government is most often what a small set of politically manipulative representatives have decided will convince a majority of people to vote for them; and, to the extent their manipulations are couched in the language of populism, what we get is what those voters desire assuming they can get someone else — like “the rich” — to pay for it in their stead.

In practice — and the reason taxes inspire such animus — as often as not taxes are really the price we pay for what other people want.

© Copyright 2010, Augustus P. Lowell

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