The Intent Of Taxation

The only two constants in this world are death and taxes and I’m not so sure about death anymore.  The mere fact of being hooked up to a machine that keeps the body alive for more years than I would care to live makes death a little more welcome.  There is a difference between merely being alive and living.  On the other hand, unless one is a member of a very small society of hunter gatherers that have only a very informal need of government.  It seems that once the congregation of individuals and family members passes approximately 160 members of the community, one starts to look to a more formal leadership arrangement.  And the more formal the leadership to more the need to support that leadership with a tax of some kind.  Living on nature’s dime means only having to fear the provider, nature, herself.  The price she extracts for living at her expense can be very high.

One might believe that as societies become more complex and grow into agrarian communities cooperation would be the main necessity.  But cooperation is mostly a voluntary behavior.  For example, most of us will operate a motor vehicle according to the regulations and laws that govern such behavior with very little deviation not because the traffic cop is sitting beside us, waiting for that opportunity to give us a ticket for that violation, but because we understand the need for general compliance if we are to remain safe.  We generally do not do 90 mph in a residential street for fear of running over a child or pet.  Now that fear may be based of the preservation of life or the preservation of the vehicle, take your pick.  But the traffic cop exists to compel those who do not wish to freely cooperate.  Thus, the need to pay the traffic cop’s wage is met through fees and taxes.  Back when people were few and land was in plentiful supply, one could stake out a claim, the acres one could possible till and let his cattle graze.  Depending on the fecundity of the earth, one might need only five acres, perhaps ten if his family was very large.  An acre is about 209 ft by 209 ft.  Five acres is about 467 ft by 467 ft.  Now if the fecundity is low a man might need five or ten times that amount.  Of course the problem is whether other individuals or groups respect your claim.  You know the old saying, the five acres on the other side of the fence always looks better.

We start to see a need for a more formal agreement when it comes to living in a commune or larger society.  Not all of us are Rambo, capable of settling our disputes efficiently with out the aid of others.  So we come up with a structure.  The family, the extended family, and close friends of the tribe now give way to more unrelated individuals living in our midst.  The fact is, our genetic survival depends of the replenishing of the gene pool.  We may only know some of the others by sight.  So we appoint, elect, or have imposed some sort of chieftain, mayor, king.  This individual will take care of the business of deciding disputes and the general protection of lives and property for the society.  For this he needs time away from the planting and harvesting of his own crops and of tending his own cattle.  He needs a tax income and that tax comes from us.  It is the cost of living in a more complex society.  Of course when societies grow beyond the control of one hear man, then he needs helpers.  The law of bureaucracy states that when one individual needs a helper to do the extra work, what he really means is that he needs two helpers to do the work while he supervises.  This is why all bureaucracies multiply so rapidly.  The problem is that if the commune has increased enough to add fifty percent more work for the head man but the number of households has only increased by twenty percent, then by added two helpers the taxes must rise by the higher figure.  If the head man cost you one percent of your earnings in food, now you must give up three percent, possibly five.  After all, the head man must always more more than his two helpers.

Now if you some how manage to become a little more productive on your five acres, great, you are ahead of the game.  But let us say you age getting old and your productivity is declining.  You still have to pay the three percent of what had been your former productivity.  The point being that taxes are really charges applied to you’re renting the land from the head man.  That is what property taxes do, charge you for the right to live on your own land.  You may have paid off the mortgage but one never pays off the taxes.  In reality, you never really owned the land, the government does and charges you to live on it.  If you rent, you are paying the taxes to the landlord who is paying the taxes to the government.  If we buy a vehicle, we pay a sales tax and may pay registration fees according to the type of vehicle and price paid.  Why does it cost any more time for a clerk to file the registration papers for a semi truck than a compact automobile?  It doesn’t but we blindly accept the fee and pay it.  Taxes really fall into one of two categories, taxes for existence or consumption.  Property tax and income tax are examples of taxes on existence.  Usually one must reside somewhere and one must live somewhere.  You will pay for the privilege of doing both.  Sales taxes are consumption taxes.  The government may not tax the basic foods you eat but it might tax, or make you pay for the right to consume, such items as tobacco and alcohol.  That toy, electronic or plastic Leggo will be taxed as will the internet service you buy.

Gross Domestic Product is measured in terms of consumption.  Americans consume about 70% of their GDP.  The rest of that number includes investment such as savings and government spending.  Since our savings has declined, one might start to realize that government spending is up.  But government spending comes from two sources, taxes and the issuance of debt.  Of course that debt can only be paid by taxes because it is the only income government has.  So if the government is raising the debt ceiling because it needs to keep government operations going, then it is increasing future taxes because at some point that debt will come due.  Now if the debt was owned only by rich people then we would care because if we, the people, decided not to pay it’s only the rich who get hurt.  But so much of that debt is owned by banks, insurance companies, pension funds, and so one, that default hurts all of us.  And since so many of our national population work for the government directly and many more indirectly, defaulting on the debt, reducing government spending on all levels, and eliminating waste will hurt a significant portion of our population.  On the other hand, the giant reset button would be cleaner than trying to cut the gordian knot.  It would actually take far less time to restructure society and the economy.  It’s funny how all those political theorist and sociologists think of societies in simplistic terms and forms while never realizing just how complex societies really are.  Believing in socialism is one thing, making it work is one hundred times harder than you will ever know.  Good luck with that.


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