The Snookie Question

Taxation is one of those notions that has survived the divine right of kings that we don't challenge much. Yes, it contains the power to destroy. Yes, free men recognize that private property is a barrier against tyranny and taxes erode that barrier. Yes, it is unlikely that a government will distribute taxes in a community better than those who are taxed would. Yes there is an astonishing graft factor that would not be tolerated anywhere else. Yes, the manipulation of taxes by both the taxed and the recipients of taxes has grown from a household industry to a gigantic lobbying monolith. Yes, taxes--their avoidance and their capture--has become a giant distortion in the economy.

But bridges must be built, roads paved, mail delivered, armies paid...fish gotta swim, birds gotta fly. While it is true that almost all the functions of government can be performed by a private effort without tax money, we seem to bump along without any deep challenge to a system that everyone sees as wasteful, inefficient, corrupt, arbitrary and often downright criminal. As the cliche states, taxes, like death, is part of our nature. We have allowed them to persist like an appendix, unchallenged, or like a galero or an atef crown, a residual of an earlier time.

We need a fresh look at this question.

It is likely the distribution process of taxes will change; less and less of government work will be done "in house." That handoff of money, so coveted by the government middleman and the avaricious recipient, is likely to decrease as the "inflation tax" and the inefficiencies of government force the rulers to divest themselves of many "projects" and put them in private hands, just as local government has. What will remain will be those wealth transfers the government uses to buy civility and support and what the government calls "investments" to "win the future." As the living standard declines from inflation and the dollar devaluation, as people are damaged more and more by inflation's impact on buying power and bracket creep, people will want a better understanding of where their money is going and why. And the inevitable question will arise: The Snookie Question.

At the base of all taxation debates--graft, inefficiency, compliance costs--lurks The Snookie Question: The indiscriminate taking and the indiscriminate distribution of someone else's money. Some are taxed more, some receive more. The justification has matured from those days of kings and princes; now the money is confiscated not because it is the king's but because the payer owes his success to someone else--presumably society, in some inexpressible way--and the recipient--again not the king--is now a business the government wants to support or the poor or the unfortunate who must receive some payment as compensation for the payers success and his lack of success. The Snookie Question asks: "Are all tax payers the same and all tax recipients the same?" Clearly they are not. Bill Gates will certainly make better decisions on where to put money that will benefit the nation than will Snookie. So should they be taxed the same? There is no evidence the government is a good investor so, while Snookie and the government are expected not to do well with money and Bill Gates is, should we take Bill Gates' money and give it to the government--or, worse, to one of Snookie's desperate friends?

Clearly there is a scale of people who can help the nation with their money and those who probably will not, those who should keep their money and those whose loss of money probably won't hurt the economy. And there is just as likely those whose receiving money will help the economy and those who will not.

Redistribution of income is not the point, it is the productive redistribution of income. Identifying the proper and productive formula sounds like a rare, reasonable task for government.