Wednesday, March 29, 2006

Progressive Fallacy Number Two

2) Every action has a consequence – the one we want.

Of course, we know this is not true. An action may have two consequences – or more. When one strikes with a cue ball the triangle of balls in billiards, all the balls move, some in unwanted directions.

Translated from billiards to politics, this means that when I raise a tax to satisfy a need, my action may have unintended consequences. I may satisfy the need and create a dependency that may prove to be unappeasable; or the tax may create another problem; or raising the tax may have been an inefficient solution to the problem; or …

There is also a point of diminishing returns that comes into play when taxes are raised. At some point, and at some wage levels, even a reasonable tax may be the straw that breaks the camels back. Just as one might not be able to afford a new Jaguar, so one might not be able to afford high priced taxes.

What happens when a taxpayer cannot pay the tax? Pretty much the same thing that happens when a renter cannot pay the rent. Either he moves to a new better paying job, or he finds a new less costly rent. Rather than suffer the slings and arrows of outrageous fortune, hard pressed taxpayers tend to maximize their assets by moving away from the slings and arrows; or, if given the opportunity, they vote out of office their tormentors, replacing them with decision makers who understand the meaning of the words “no new taxes.”

Now, anyone who has attempted to balance a household budget will have noticed that the trick involves adjusting money coming in to money going out. This delicate adjustment is mentioned by Charles Dickens, the author of David Copperfield, in connection with Mr. McCawber’s finances: “Annual income of pounds 20 coupled with expenditure of only 19 pounds 19 shillings and 6 pence was, he mused, happiness itself. But spend say 20 pounds and 6 pence and it’s misery.” For McCawber, the over expenditures led to the poor house. To avoid debt, most of us are unusually attentive to the delicate balance; but then, most of us cannot charge our debts to a generation of workers and taxpayers yet unborn.

Progressives, those who worship at redistributionist alter, have got it figured out: We will use the government as a redistributionist instrument to move goods and services from the haves to the have nots according to the socialist formula "From each according to his means, to each according to his needs." Translated into the modern idiom, this means: Connecticut millionaires comfortably situated in the state’s Gold Coast, Fairfield County, won’t mind it a bit if the state forces them to abide by Christian commandments.

There is an unintended consequence involved in this compulsory charity though: The delicate balance between getting and spending, which serves as a break on profligacy, is overthrown when any expenditure, however extravagant, is permitted because no one will complain about spending. To put it in mathematical terms: There are in Connecticut more consumers of millionaires’ dollars than there are millionaires, and politicians are expert vote counters.

So, where is the break on spending to come from? Where is the cop who will haul off to the poor house legislators who spend beyond their means? Who will say no to the prodigal’s sons in the legislature? And is there an unintended consequence to limitless spending?

There is indeed. Just as no man is an island unto himself, but part of a larger continent, so no state is an island unto itself. If the cost of doing business in Connecticut continues to be driven ever higher by borderless spending, businesses will continue to migrate to less punishing states. And so will millionaires, leaving –Guess who? – holding the bag.
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