Cheer Up, You’ll Be 1.5625 Percent Free!

 

H/T: WRSA

Robert Gore, straightlinelogic.com, robertgore1@me.com

If you were offered a glass of poison to drink, you would refuse. How about a “compromise” at half a glass? Why is compromise extolled as a political virtue? If smart meets stupid halfway on an issue, then does it again and again, after the fifth iteration smart is 96.875 percent of the way to stupid. If you are on the stupid side of an issue and cannot win an immediate victory, nothing serves your purposes so well as compromise, which is how statists usually serve up their poison. By even the second iteration (75 percent), smart is beyond retrieval.

Consider health care. At some point in our distant past, the idea that health care was a right was a fringe notion, rejected by most of the public. Many recognized that one person’s right to health care was another person’s coerced obligation to provide it. A “right” that violates the rights of someone else is not a right, reason enough to reject it. There was also a general awareness that capitalism provides good and services, including medical care, far more efficiently than governments.

Fringe notions went mainstream with the Great Depression, when the government got into the robbing-Peter-to-pay-Paul business in a big way. Although want of medical care did not explicitly fall into Roosevelt’s freedom from want, the third of his four freedoms, it would prove to be an easy extension. Unfortunately, freedom from government coercion was not among the four; the New Deal finished the demolition of that one.

The government-provided-medical-care camel got its nose under the tent after World War II. Companies that funded employees’ health insurance received a tax break and such insurance became a popular benefit. The camel got its hump into the tent in 1965, when Medicare and Medicaid were signed into law by President Johnson. Medicare was health insurance for the elderly; Medicaid was a federal-state program for the poor. This was the 50 percent iteration on the way from market-based medicine to a government monopoly.

Both programs expanded steadily in scope and cost—as such programs always do—far beyond what had been projected by their sponsors, despite occasional protests from “heartless” critics. A nonstop drumbeat went up comparing the “primitive” US health care system to “enlightened,” government provided systems in Europe and Canada. The Clintons floated their version of government health care, but the American public was not ready for it. “Ready” is statist code for not yet brainwashed enough to swallow another expansion of the government and diminution of individual freedom. Most such expansions have been floated as trial balloons that initially were shot down. Their proponents are nothing if not persistence.

It is a mark of how many iterations had already been achieved towards full government control of medicine that the next big one—a prescription drug benefit—was signed into law by a Republican president, George W. Bush. We may never get to full government control, but Obamacare has us at the sixth iteration (98.4375 percent), which is only one iteration away from 99.21875 percent: “single payer” medical care, or a government monopoly (with an exception for those wealthy and powerful enough to access what’s left of market based medicine). 99.21875 percent is close enough for government work, another statist victory by compromise.

With this history in mind, put a hand to your ear and you’ll detect another alarming drumbeat. The most basic of human rights—the right to produce and provide for one’s self—was swept away by the income tax, initially advertised as a nominal toll on only the very wealthiest. We know how that went. It has become the iron hand in the pocket of every productive American, and the IRS is probably the most feared government agency. If the income tax is morally repugnant, what does that make wealth taxes, or taxes on assets that have already been taxed?

The camel’s nose is well under the tent—inheritance taxes are wealth taxes. The International Monetary Fund has quietly suggested new wealth taxes as a source of revenue for all those insolvent European governments. New York’s mayor has proposed a mansion tax to fund low income housing. Wealth taxes dovetail perfectly with statists’ brand new, tiresomely old issue: the gap between the rich and poor. It is a shocking truth that under capitalism, some people get rich while others remain poor, reflecting differences in productive ability. It is also true that capitalism gives poor people their best opportunity to get rich, or at least join the middle class, and has eliminated more poverty than redistribution ever has or ever will. (Redistribution creates poverty. Visit egalitarian paradises Venezuela or North Korea if you doubt it.)

Wealth taxes are the outer limit of governments’ rapacity. If legal protection of the right to keep what you earn is one end of a continuum and slavery to the government is the other, such taxes are the sixth iteration (98.4375 percent) towards the latter. They obliterate the right to keep what one has, and lay bare redistributionist pretenses of concern for the poor. The rates will start low and then climb. The high and mighty will use loopholes to preserve what they have, while consigning the aspiring poor and middle class to perpetual stagnation. Who is going pursue what used to be the American dream if the government takes a good chunk of what you earn when you earn it, and then comes after you for whatever remains?

A wealth tax will leave us 1.5625 percent (100 minus 98.4375 percent) free. There is a silver lining. The tall trees will be felled not to make way for the saplings (and the saps who believe politicians’ promises), but to provide last gasp funding for the government before it goes completely bankrupt. Once it does, Americans will have the opportunity to reclaim the other 98.4375 percent of their freedom.

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