Tuesday, October 13, 2009

Representation without Taxation

While attempting my first half-marathon, I decided that listening to a podcast would sufficiently distract me from my wheezing more than my usual music playlist. So as I set off, I hit play on Bill Maher’s HBO show, Real Time.

If you’ve read this blog before, you may be surprised to hear that I would listen to Maher’s show, but I find it thought-provoking and funny, and while it is heavily slanted away from many of my views (at least fiscally), I like that Maher is usually not afraid to call “BS” on his fellow liberals when required, and he almost always has some element of balance to his guests, and treats them respectfully. I think it’s an entertaining and relevant format, and have enjoyed it ever since it was “Politically Incorrect” years ago on Comedy Central. Being on HBO gives it that extra little kick as well as nothing is out of bounds!

Anyway, five minutes into the podcast, I cringed in horror when I was told that his guests that evening would be Michael Moore, Paul Krugman and Elliot Spitzer. Maher usually does a good job of at least providing a little bit of ying to the typical Hollywood liberal yang, but I guess Fox News had a monopoly on guests that night. Despite my initial urge to turn off the podcast and go back to the new Pearl Jam album, I decided to stick with it. Like they say, keep your friends close, but your enemies closer.

Moore kicked off the show promoting his new movie that lays out the evils of capitalism. The irony of promoting a film about the evils of capitalism was apparently lost on Maher and Moore.

The conversation moved on to health care and Moore started ranting about the need for a governmental health care system punctuating it with the fact that “the New York Times said two-thirds of the American public want a public option.” Whether the NYT is capable of unbiased reporting on this poll remains to be seen, but let’s assume this was a scientific poll.

Herein lies the problem.

The results of a public poll allow Moore and more importantly, real politicians that matter, to bypass the difficult conversations around healthcare reform, and go straight to the populist view that “the American people want it, so we must give it to them!”

However, before we throw a trillion dollars at the problem just because “the people” want to, we need to take a look at who wants the government to continue spending vasts amounts of money and why.

The key to understanding any public opinion on public spending is to understand that, in 2009, 47% of Americans will pay zero or negative income taxes. Therefore, 47% of Americans have access to all the benefits of new government spending, without contributing a dime to the bill. It’s like the friend that is always at happy hour, but never buys a round.

Therefore, it’s immediately clear why at least 47% of the 67% quoted by the NYT want a public option, or more broadly, anything that is funded by the government. Who doesn't like free stuff? The poll question might as well been, if the government is willing to buy you a new car, would you want it? I couldn’t find the equivalent numbers for those who only pay a small % of income tax, but I’m sure that would get the 47% much closer to 67%.

Therefore, the sneaky trick of politicians is to get as few people as possible paying taxes. That way, when politicians want to expand government programs that will provide them with more job security, a huge segment of the population will automatically be in favor of those proposal because they stand to get something from the government for nothing. Once this free-riding-off-the-government merry-go-round starts, it’s very difficult, if not impossible to stop it or even slow it down, just ask Europe.

We’ll get to fixing the tax code another time…

In the meantime, if we rely on polls to draft legislation, shouldn’t the next House bill declare that every other Friday is free pizza day - all you can eat pizza, paid for by your local pizzeria owners. We could call it Populist Pizza Day. Hey, I’m sure a NYT poll would show that at least 75% of Americans would want that!

Our politicians need to start passing government spending bills only if they make sense and are fiscally sound, not just because they are popular. Unfortunately, they don’t have the guts to buck the populist sentiment because it’s much easier to run a popularity contest than it is to run the United States of America.


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