Tax the Rich?

Just read an article that explains how the rich need government more than the rest of us.  You can find it here:

http://blog.buzzflash.com/node/13605

I have some issues with this.  Of the five 'benefits' that government provides, only one of them is particularly costly: Security in the form of the military.  The military is the third largest item on the budget each year, trailing Medicare and Social Security.  Nonetheless, let's go through them one by one.

1. Security: Back in the 18th Century, rich people were attacked by mobs so they get more benefit from police, military, and emergency services.  Those of us who aren't rich don't benefit from these things.  Oh, we don't?  The argument presented is nonsense and drifts into unsupported claims of police attacking the poor to make the wealthy feel safe.

2. Laws and Deregulations: Okay, just the title makes my head hurt.  Make up your mind on this one.  Deregulation is the removal of laws.  So, the rich benefit when laws are passed and when they are repealed.  Wow!  Sheer genius!  Government is a protection racket.  Legislatures pass laws that prod business into supporting the legislators who in turn write loopholes in those very laws.  The problem is not with the rich but with the corrupt legislators.  As an example, back in the 90s, Microsoft spent nothing on lobbying the central government.  Then, suddenly, Microsoft was sued for giving away a product free with their operating system.  Having learned their lesson, Microsoft now spends millions on lobbying (i.e. bribes to Congressmen).

3. Research and Infrastructure: The text presumes everyone is getting the use of airports, seaports, the energy grid, and so forth for free.  The more you use, the more you pay.  As for public schools, the rich frequently don't use them (their kids often go to private school) but are still forced to pay for the public schools.  As for the research stuff, the government should get out of R and D and let the private sector do it.  As for infrastructure, Indiana privatized a tollroad and balanced its budget.  Rather than pay for roads indirectly through taxes, we could pay for them directly (and less expensively) with tolls.

4. Subsidies: 'Tax expenditures' is one of the silliest notions ever presented.  The idea is that if the government doesn't take your money, that's an expenditure on its part.  In other words, your money really belongs to the government and it is only through the generosity of the government that you keep as much as you do.  Your take-home pay is a 'tax expenditure' of the government.  Ha!  As for the actual checks sent to corporations, let's just stop that and call it even.  The idea that we need to tax the rich so we can cut them a check is circular reasoning.  Stop the checks and stop complaining.

5. Disaster Costs: On the one hand, we need to more heavily tax corporations (like Exxon) to pay for oil spills and on the other hand we need to tax corporations (the financial industry) to pay for bail outs.  I have a simple solution for the later: no bailouts.  Corporations need to fail if there is going to be any responsibility.  Failure teaches discipline while bailouts teach irresponsibility.  Let them fail so they go out of business and trouble us no further.  As for taxing corporations for cleanup, that is just a different route to taxing citizens.  Corporations do not pay taxes, they collect them for the government.  Taxing a corporation is just a variation of the sales tax.  No one thinks the 7Eleven is paying the sales tax, it just collects it for the government.  Better to penalize the corporation that spills, perhaps driving it out of business; future corporations will invest more in preventing such disasters if only to remain in business.

Common Sense: Government wants as much money as it can get from the populace.  It will tell you the Earth is warming and we need to tax.  It will tell you that the infrastructure is failing and we need to tax.  It will tell you that people don't have health insurance and we need to tax.  The government will always have a new cause that requires funds.  Moreover, government understands divide and conquer.  Government says it will only tax the top 1%.  Or maybe the top 5%.  Or the top 10%.  It is counting on the rest of us to gladly take money from Bill Gates or Warren Buffet that can go into our pocket.

A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship.

Alexander Tytler, 1787