June 25, 2000

Tax Freedom Day Bypasses Mothers to Father’s Day

Not so long ago, Americans fretted that Tax Freedom Day – when we, instead of government, start to keep all our earnings – fell on Mother’s Day.

Now, Americans for Tax Reform (ATR) tell us the cutoff has sneaked up to Father’s Day.

Past estimates failed to account for the hidden costs of government. A true measure should include borrowings and the pass-along costs of regulations imposed on businesses.

ATR proposes we scrap Tax Freedom Day in favor of “Cost of Government Day.”

The watch-dog organization calculates the average worker will have spent the first 167 days of this year earning enough gross income to pay off the financial obligations imposed on him/her by federal, state and local governments.

This is 45 percent of total income – by any standard, a helluva burden. Historians tell us civilizations collapse when half their production goes to support non-producers. Thus, 45 percent is too close for comfort.

Before it is too late, our lawmakers should take time out from doing good with other peoples’ money to read the 14th century book “Muqaddimah.” It was written by an Arabian philosopher, Ibn Khaldun, when the Ottoman Empire was at its height.

The following translation by Frank Rosenthal is available for purchase from Princeton University:

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It should be known that at the beginning of a dynasty, taxation yields a large revenue from small assessments. At the end of the dynasty, taxation yields a small revenue from large assessments.

When the dynasty follows the ways of group-feeling and superiority, it necessarily has a desert attitude at first.

The desert attitude requires kindness, reverence, humility, respect for the property of other people, and a disinclination to appropriate it except in rare instances.

Therefore, individual imposts and assessments – which together constitute the tax revenue – are low.

When tax assessments are low, subjects have the energy and desire to do things. Cultural (commercial) enterprises grow because low taxes bring satisfaction.

When cultural enterprises grow, the number of individual imposts mounts. In consequence, tax revenue – which is the sum total -- increases.

When the dynasty continues in power, and their rulers follow each other in succession, they become sophisticated. The Bedouin attitude and simplicity lose significance.

Bedouin qualities of moderation and restraint disappear. Royal authority with its tyranny -- and sedentary culture that stimulates sophistication -- make their appearance.

The people of dynasty then acquire qualities of character related to cleverness. Their customs and needs become more varied because of the prosperity and luxury in which the dynasty is immersed.

As a result, individual imposts upon the subjects – laborers, farmers, and all the other taxpayers – increase. Every individual impost is greatly increased in order to obtain a higher tax revenue. Custom duties are placed upon articles of commerce at the city gates.

Eventually the taxes will weigh heavily upon the subjects and overburden them. Heavy taxes become an obligation and tradition because the increases took place gradually. No one knows, specifically, who increased them.

The assessments increase beyond the limits if equity. The result is that the interest of citizens in cultural enterprises disappears. They compare expenditures and taxes with their income and gain. They see the little profit they make. They lose all hope.

Therefore, many of them refrain from all cultural activity. Total tax revenue goes down and individual assessments go down. Often, when the decrease is noticed, the amounts of individual imposts are increased by the dynasty. This is considered a means of compensating for the decrease.

Finally, individual imposts reach their limit. It would be of no avail to increase them further. The costs of all cultural enterprises are now too high. Taxes are too heavy. The profits anticipated fail to materialize.

In the end, civilization is destroyed because the incentive for cultural activity is gone.

The strongest incentive for cultural activity is to lower, as much as possible, the amounts of individual imposts levied upon persons capable of understanding cultural enterprises.

In this manner, such persons will be psychologically disposed to undertake them, because they can be confident of making a profit.

God owns all things.

PARTING SHOTS

Washington, D.C., residents are agitating again for statehood, contrary to the U.S. Constitution. The trouble with the District is that it’s too small for a state and too large for an asylum.

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If you can fool some of the people all of the time, apparently that’s enough.

Lindsey Williams is a Sun-Herald columnist and can be reached at linwms@lindseywilliams.org