Obamacare

Worse Than Taxes

The real burden of government is the spending level

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Bill O'Reilly is mad at me because I'm not mad enough about taxes.

Last week on The O'Reilly Factor, we talked about California's and New York's enormous budget deficits and planned tax increases. Those states would have big surpluses had they just grown their governments in pace with inflation. But of course they didn't. Now the politicians act like their current deficits are something imposed on them by the recession.

But that's nonsense. They created the problem with their reckless spending.

Let's look at the particulars. Had the government of New York state grown at the rate of population and inflation over the past 10 years, it would have a $14 billion surplus today. Instead, spending grew at twice the rate of inflation. So New York has a $3 billion deficit.

To dent California's deficit, bureaucrats will withhold an extra 10 percent from every taxpayer—at least from those who don't flee the state. New York planned to raise the price of new license plates, but then backed off. The visible tax was unpopular. But the hidden taxes grow.

Hidden taxes are more pernicious because they disguise what we pay for government. We blame merchants, not our legislators, for the high price of gasoline, liquor, cigarettes, and phone calls, but the money goes to the political thieves.

New York imposes a gas tax of 61 cents a gallon—almost a quarter of the cost of the gas. New York City taxes cigarettes at $4.25 a pack. Washington state collects $26 per gallon of hard liquor. Illinois politicians take a sneaky cut when you buy junk food: They add 6.25 percent to the cost of soda and candy.

My phone bill lists seven different taxes—unintelligible stuff like a "Public Safety Commission Surcharge" and an "MCTD tax." The payroll tax is one of the biggest hidden taxes. You assume that you know what you pay because it's listed on your paycheck, but that's actually only half of it. Employers must pay an equal amount—money that otherwise would have been part your salary.

O'Reilly was most indignant about the visible taxes. "You, Stossel, are going to be paying 45 percent of your money to the government!" he said. I replied that I already pay more than that, since I live in New York City.

But I apparently was not indignant enough, because later in his show he told comedian Dennis Miller, "Stossel doesn't get it."

O'Reilly is right about my not being furious. It's not that taxes don't anger me. They do. But I'm more angry about the arrogance of the ruling class. It reminds me of Walter Williams' riff: "Politicians are worse than thieves. At least when thieves take your money, they don't expect you to thank them for it."

Taxes, even counting hidden taxes, are not the real measure of what the thieves take. The true burden of government, the late Milton Friedman said, is the spending level. Taxation is just one way government gets money. The other ways—borrowing and inflation—are equally burdens on the people. (State governments can't inflate, but they sure can borrow.)

O'Reilly told me that America is ready for a tax revolt. I hope he's right. But I don't think it will happen until more people see the ruling elite for what it is: a gang of arrogant bullies that has the audacity to believe that they know how to direct our lives better than we do.

That's why, bad as the taxes are, I'm more upset about ObamaCare, Medicare, the "stimulus," the auto bailout, the bank bailouts, the Fannie/Freddie bailouts, the trillions in guarantees, and on and on.

The politicians' spending schemes represent presumptuous interference in our lives. They are an assault on our autonomy.

John Stossel will soon host Stossel on the Fox Business Network. He's the author of Give Me a Break and of Myth, Lies, and Downright Stupidity.

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  1. The other ways?borrowing and inflation?are equally burdens on the people.

    Get a brain, morans!

    1. How are they? They are equally. What are they? They are burdens.

      Why can’t the adverb follow the verb? “They fought courageously.” “He walked tentatively.” “She sat pensively.” “They equally are burdens,” would have been more clear, perhaps, but I think the word order is acceptable.

      1. All right. I guess I thought that instead it should have been “equal burdens” or “equally burdensome.”

        I hereby retract my previous comment. Dont’t read it!

    2. Language is defined by popular usage, not by grammar textbooks. If you can understand it, it’s correct. Sez me.

    3. You’re a tool and a stain on public discourse. Instead of making points about the substance of what Stossel is talking about, you choose to pick at a minor grammatical point that turns out to be correct. The next time you decide to write something, ask yourself “Am I adding to the discussion, or am I being a snarky, petty tool that just likes to be nasty?”

      1. I swear, I hate i reilly hate Bill O’Reilly.. That guy is freaking pain..

        Such an arrogant basta*d..

        I dont know why such people are popular..

  2. The spending will continue until even people like our resident liberal trolls can admit that government cannot provide for our every need. States can’t even afford the social programs we currently have, and yet people like them are clamoring for a single-payer health care system. Even if such spending were a legitimate function of government, the money just isn’t there!

    1. Just because government can’t provide for my every need, doesn’t mean it shouldn’t try…

    2. Actually the money IS there. We would just need to pay the kind of taxes most people around the world do.

      Instead, we choose our lovely McMansion-SUV-CheapChineseCrap triumverate.

        1. and also Fascist

      1. Chad, the U.S. has the highest corporate taxes in the world. This is actually a double tax. Many states tax in addition to federal taxes at an obscene rate – and the taxpayers get nothing in return. You think the U.S. should become like Europe? I agree. We should start rejecting socialism like the Europeans.

      2. Yor’re right Chad,

        My bureaucrats will stop by your house later today to help YOU get you’re spending priorities straight

  3. even people like our resident liberal trolls can admit that government cannot provide for our every need

    Nah. They’ll just bolt, like joe.

  4. Even if such spending were a legitimate function of government, the money just isn’t there!

    No problem.

    1. I’m sorry Sen. Reid, I forgot that we can just run the printing press and make money out of thin air. Silly me.

      1. She’s on full print! She can’t take any morrrrrre!

  5. The spending will continue untill morale improves.

  6. You want to get rid of your Public Safety Commission Surcharge?!?! I knew that heartless bastard, Stossel, would hate something as essential as public safety.

    1. Must hate the kiddies

  7. OMGosh what makes the almight John Stossel such an expert all of a sudden??

    Jess
    http://www.ultimate-privacy.br.tc

    1. I miss Jack Beeno.

        1. plus (+) 2

    2. I don’t know – a degree from The University of Chicago and decades of real investigative journalism experience?

  8. sage, it was “Beano”, like the stuff that keeps you from farting.

    Fill in your own joke here.

  9. So O’Reilly really is a hothead?

  10. You don’t get hotheads if you loofah.

    1. No you don’t get hotheads if you eat falafel.

    2. O’Reilly + loofah = mind bleach

  11. Totally agreed here. Tax cuts are no good if spending isn’t brought under control.

  12. This is one of the many things that drove me crazy about bush- and estranged me from his republican followers.

    His tax cuts were all well and good, but how much sense does that make when you simultaneously increase spending and the budget deficit.

    I hate taxes, but frankly, I hate spending more because it is clear that these are deferred taxes. Taxes, with interest, if you will. I’d be content if taxes stayed where they were, spending was cut by half, and we paid our creditors. Then, in 20 years or so, we can reduce taxes in line with spending.

    In other words, spend less than you make. Crazy, I know.

    1. What spending are you going to cut?

      To cut 50%, please choose one of the following:

      1: Shoot any eldery or poor person who shows up at a hospital without insurance. Invest in providers of ammo, whose will be printing cash.

      2: Eliminate Social Security and invest in dog food stocks, because demand will skyrocket

      3: Ask the French for protection and learn Arabic

      1. I think you have invented a new logical fallacy: the false trichotomy.

        And by the way, I’d be happy if we could cut a lot less than 50%. For a start anyway.

        1. I don’t think you understand our federal budget. Well over 80% is Social Security, various health programs (mostly Medicare and Medicaid), the military, and interest on the debt. To cut spending in half, you would have to eliminate ALL spending other than these programs, and then either completely eliminate the military, the health spending, or SS. Which do you chose, and how do you plan to deal with the consequences?

          1. Cut all social security, medicare, medicaide, schitchips, all welfare programs and replace them with an extreme MINIMAL safety net. Cut the completely unnecessary corporate welfare “jobs created or saved” military contracts. Cut all subsidies to private industry and non profits. Cut all NEA, stadium, and museum welfare and shit like it. Fuck your consequences.

            1. OK. You have just cut my grandmother’s income (and millions of others like her) to near zero. Now what? Do I have to make up for it? Why not just raise my taxes? It would be simpler and ensure that grandmother’s who aren’t lucky enough to have nice and relatively well-off grandsons like me
              don’t get reduced to begging.

              I don’t think you understand that SS IS minimal for many recipients.

              1. Why don’t you take care of your grandmother? Fascist

                1. But I don’t want to take care of my grandmother! It’s too hard, you do it!

              2. Social Security is a Ponzi scheme. The money the government collects currently from people who are barely making enough to put food on their tables is taken (at the threat of imprisonment) by a group of people who disperse it among themselves, and give the rest to old people. There is no saving or investing of those funds. 100% of all those funds collected is spent or given away and it’s still in the red. It is the exact same thing that people in the private sector have gone to jail for. That is an immoral system.

                If your SS were eliminated then you could give 100% of that money that you had taken from you by the government directly to your grandparents. There would be no middle man so no overhead cost. They would get every cent.

                And do not preach this nonsense about SS being the only thing that people have because the government is quite happy to toss people off of Medicare if their bank accounts happen to drift over $2000 in a single month. So it’s not a safety net. Over a three month period, SS pays out a lot more than that for a lot of seniors and they have no recourse but to spend that money or give it away. Nursing homes and doctors love that stuff because it they can justify charging higher prices then to everyone. It’s a scam to keep high prices in health care and the wallets of everyone involved loaded with money.

                We could solve a lot of our healthcare cost issues by completely wiping out that system and putting those people who have run that scam for years behind bars; that includes the nursing home admins, nurses, doctors, and everyone who works for Medicare and Social Security.

                1. TomG – someone who gets it.

              3. Really, I am in favor of gradually easing out of the social security system, and allowing people to opt out of it. But it needs to go.

                If it was between the status quo and cutting it immediately, I would cut it.

          2. “Well over 80% is Social Security, various health programs (mostly Medicare and Medicaid), the military, and interest on the debt.”

            Nice try Chad,

            Listing SS at the start of your list implies that it is majority of fed spending. The reality is quite different.

            http://www.warresisters.org/pages/piechart.htm

            There really are quite a few programs that could be completely elimated without anyone missing them

            http://www.gpoaccess.gov/usbudget/fy10/browse.html

            And defense spending can certainly be cut by at least 50% – probably more.

  13. The government is past the point where they can reduce spending. There are too many people dependent on the state for their livelihood; too many programs; too many corrupt politicians. When you consider how much of our incomes the state takes even now–property taxes, income taxes, sales taxes, fines, fees, tickets, and more–and even with that colossal amount (maybe close to 60%), they are desperate for money.

    This isn’t going to go away. The parasite is growing.

    1. I think you are leaving out one fact here that is relevant to the discussion.

      The fact is that we are approaching the point where more than half of the people don’t pay anything in federal taxes.

      Of course there is no way the gubbment can stop spending when more than half the people think of them as an unlocked ATM.

      One of the reforms that has to happen is that everyone must have to pay some amount taxes no matter what.

      You can argue about the amount or the formula, but if everyone was paying in, then they wouldn’t be so quick to demand new taxpayer provided health care programs for the gladiators at the circuses.

      But I agree with your main point that the amount of entitlement spending that is going on has gut hooked a ginormous amount of people.

    2. First they came for the poor with welfare, food stamps, medicaid etc. Then they came for the rich with subsidies, grants, targeted tax cuts and medicare. Then they came for the middle class with a healthcare bill…

      We’re all welfare queens now.

  14. Government spending is really easy to understand: it’s a question of how much of the GDP is seized and spent in ways over which each individual has essentially no control. You should be all in favor of government spending if you’d be willing to have a random committee of fucktards come between your employer and your paycheck, and decide for you how the money you would otherwise have been paid should be spent on your (and on others’) behalf. Looked at this way, it’s easy to see that this would be a horrendous violation of your property and your liberty.

    Of course, this is already happening (it’s called withholding tax and FICA taxes). The question is: do you want more control over your property and your life, or less? If you want bigger government, you’re voting for less control over your own property and your own life.

    1. Yes, paying for roads and schools and cops is a horrendous violation of my liberty. I mean, without that money, I can’t buy a new SUV until next year, for the love of God!

      Do you guys realize how greedy and idiotic you sound?

      1. Damn. You got us dead to rights there, Cad. Game over, fellas.

      2. Oh, he got us. As long as the trains run on time, it’s all justified

        Fascist

        1. Oh, yes, Chad. We should work through July each year to pay for roads and schools and, oh, the gold-plated pensions of government employees so they can retire at 55 and be on the public dole for more years through their lives than they’ve actually worked. Spoken like a true bureaucrat.

  15. While I agree that spending is the real problem, the normative prescription that government spending should grow no faster than inflation is problematic. Inflation, in this context, is usually equated with the growth rate in the _consumer_ price index. But the product and services mix used to measure that index consists of different things than the kind of stuff government should be spending money on, even under the most libertarian assumptions.

    The crucial distinction is that a lot of things that drive consumer spending needs are positively affected by _huge_ productivity improvements brought on by technology improvements or by efficiencies stemming from international trade. Hence, the price of consumer goods such as electronics, clothes, etc. has fallen in real terms.

    Those productivity gains aren’t realized to the same extent in personal services – i.e., services provided by people, where the person-to-person interaction is a huge part of the value chain. Yes, teachers, soldiers, firefighters, police, and healthcare providers have all gotten more productive as a result of technology and trade – but those gains can’t keep pace with the overall (goods-based) economy.

    As a result, the cost of personal services rises faster than the cost of goods in this economy. And since government spending is largely based on personal services, capping its growth at inflation means a reduction in the services procured – fewer police, soldiers, healthcare providers, firefighters, etc.

    Over the past few decades, microchips have gotten twice as fast every 18 months or so on a per-dollar basis; human beings, while capable of learning, just haven’t figured out how to evolve their productivity at the same level.

    So when people decry that healthcare cost, or education cost, or the cost of policing or firefighting or national defense go up faster than inflation, the underlying assumption is for that to be a bad thing – and that assumption needs to be examined a bit more vigorously.

    As a society, we’re spending more of our GDP on health care year over year, while spending less on, say, consumer electronics. But that’s because the latter are becoming relatively cheaper, not because we’re depriving ourselves of gadgets.

    1. Except that a huge part of government spending isn’t actual “services” – it is merely merely transfer payments from one individual to another.

    2. Inflation, in this context, is usually equated with the growth rate in the _consumer_ price index.

      What about the notion that inflation is greatly exacerbated by the printing of money?

  16. O’reilly is right. Stossel doesn’t get it. O’reilly loves spending when it is his team doing the spending. What Stossel doesn’t get is that this is about partisanship dammit not actual, reasonable discussion about the role of government or it’s spending levels.

    1. Hey, I’m just trying to defend the children from the meth-heads. And the folks, you know. The Spin Stops Here ?

  17. Stossel, if you read this, just call O’reilly a whore for the Republican party that has no interest in a reasoned debate. I would pay money to see that on TV.

  18. No, we just need top stop paying Police, firefighters etc $100k plus a fucking year, plus crazy pensions that start at 50ish, and then REALLY stop allowing them to double dip on their pensions.

    If we can find some private to go fight in Iraq for $15-20k a year, you telling me we can’t find someone to be a cop for the same rate?

    1. As a former member of the military, let me just say that most junior enlisted folks get a salary of more than $20k per year. As an E-3, I pulled ~$1200 twice a month after cost-of-living and food allowances. That’s around $29k per year.

      And that was living on base. In a lot of areas, housing allowances can be over $1500/month for an E-3 without dependents– that’s about $18k extra per year. Not ALL junior enlisted folks live off base, but I was surprised at how many actually do.

      Look, I’m not saying that firefighters are entitled to $100k+ per year, but the $15k to $20k figure is not really representative of what military folks are paid.

    2. Kronenburg, we actually agree on something – public sector pensions are indeed a major part of the problem.

      Ask yourself if you really think there are more cops, teachers, and firefighters around than there were a few decades ago. The answer is not really. The problem is that their pensions are ridiculous, paying too much and allowing them to retire far too early. They can also be gamed, with many police and fire departments having a new chief every year just so they can bump someone’s final salary before they retire.

      As another point, if much of what is breaking state budgets today is the pensions of people working in the past, wouldn’t proper accounting put those COSTS in the past as well, and make the “growth” of government look a lot smaller? Indeed, the only sector of state budgets that has really been growing is health care, which we have debated endlessly around here.

  19. AM, we have examined it. We’re spending more of our GDP on health care and less on consumer electronics because the govt gets involved in massive regulation of health insurance and medical care and they pretty much let the market handle the production and sale of electronics.

    1. Hey, maybe the government should make everybody buy big screen TVs. Of course we would subsidize those who can’t afford them by taxing anything with more than a 40-inch diagonal.

      Sound familiar?

    2. That’s a nice theory, Nick, but it is contradicted by facts. Prices for all manufactured goods are falling much more rapidly than just about any human service – government provided or otherwise. This is because manufacturing is comparitatively easy to automate as compared to, say, teaching or fire fighting.

      1. How does that refute or even respond to what he said? Shut the fuck up.

  20. That private doesn’t have a union, Kroneborge.

  21. You are so right Nick.

    That’s the biggest problem. IMO, there should either be no public unions, OR, they should not be able to lobby, or support politicans, or ballot initiatives. There is to much of a conflict of interest, when they are helping to elect the people that will sign off on their contracts.

  22. Well, picking a fight with O’Reilly is moving in the right direction.

    I’d still like to see more separation on policy recommendations. Are any of the resident FOX wackaloons not blaming Obama and the Democrats for increased government spending?

  23. How about rightwing wackjobs whose stupid self-serving economic theories destroyed the economy don’t get to bitch while the Dems–once again–clean up their mess?

    1. By clean up the mess, you mean the Obama administration taking money from productive sectors and giving to Arizona’s 9th congressional district? I’ll live with the mess, thank you very much.

    2. When you say “clean up their mess,” do you mean put their spending record to shame? Do you always use gasoline to put out fires? Sounds logical to me.

    3. How about rightwing wackjobs whose stupid self-serving economic theories destroyed the economy don’t get to bitch while the Dems–once again–clean up their mess?

      You’re talking about Keynesianism, right?

    4. Barney Frank is a rightwing wackjob, great point, Tony, now that’s using your head for something besides radish snapping.

      Hopefully, this won’t come off as overly critical, but, shouldn’t wackjob be spelled whack job? It’s really not important, your thoughts still carried over quite well.

      Just because you can’t spell, and lack even the most basic cognitive skills, doesn’t mean the ridiculous things you believe aren’t true. Judging by the all the negative things people in general say and write about you, it seems very likely you’re just misunderstand.

      Sure, people are always laughing and pointing at you anytime you venture out of your special circle and try to share your special knowledge and insights. It’s only because you’re “special,” and they’re jealous of your “special” reality where their boring ordinary facts mean nothing and what is true and what is not is completely up to you.

      It’s an unfair and messed up world for sure.

      1. What’s exasperating is the fact that you actually believe Rep. Barney Frank is responsible for the financial crisis. It’s like you people aren’t capable of assessing whether your mindless FOX-news parroting even makes rational sense. One guy in Congress is the big bogeyman of a worldwide financial crisis. The people feeding you this utter bullshit do not have your best interests in mind, including the strength of your connection with the facts of the universe we actually inhabit.

        1. Tony, your right one man wasn’t the boogey man. A whole lot of them were.

          Frank and Dodd were two of the biggest. Frank was one of the chief causes of the housing collapse by forcing mortgage companies to take on high risk mortgages. How did those housing bails help? That’s right the high risk people still were foreclosed on in 90 days.

          Bush has horrible at keeping a budget. Agreed. But the “leftwing whack jobs”, to use your words, have been running the show since 2008 (That’s when they took over Congress). Bush was an amatur spender to what we have now. How many jobs did that great Simulus create? Remember, we have to pass it this second or else umemployment will go over 8. It’s over 10 (17 really).

          Why is NY and CA on the verge of bankruptcy? CA if it would have just increased with inflation plus population growth would be running a 10 billion dollar surplus today. Instead they are in a 23 billion dollar hole. CA is a perfect example of where our government is headed.

  24. “once again”?

    When did the Dems clean up any fiscal messes before. Or are you reffering to win Newt shut down the government to get us on the track of balanced budget.

  25. Don’t forget the local police. They have degraded from “Serve and Protect” to another arm of the revenue collection to fill the gap.

  26. To dent California’s deficit, bureaucrats will withhold an extra 10 percent from every taxpayer?at least from those who don’t flee the state.

    Bastards, but I was ahead of them and changed my witholding deductions before they stole the 10% from my paycheck.

  27. Is it possible, that with federal and state taxing at their own separate rates, that we are headed towards >100% taxation? It seems that’s where Chav’s and Stephen D’s justifications end up.

    1. Ummm, there is a long, long, long way between our current 20% federal, 35% overall tax system and a 100% tax system (which no one is calling for and neither works in theory or practice).

      1. Where do you get 35%? Are you counting taxation of business (that affects the consumer) and the affects of inflation? Things like fines? The lost productivity from regulations? After a while the economy would most likely just go under total state control.

        1. The Heritage Institute says our total tax burden is now only around 28%.

          http://www.heritage.org/index/Country/UnitedStates

          My apologies.

  28. John, don’t miss your opportunity to get your message out over O’Reilly’s attitude.

    Great point about hidden taxes, by the way.

    1. I seem to remember a Stossel report when he was on network tv that outlined all the hidden taxes one pays through their day. The amount was staggering and, this was before the internet and cell phones with all their hidden taxes and fees, mind you.

  29. Stossel gets it. It is O’Reilly who doesn’t get it. It is like the drug companies (abetted by the FDA) trying for a profitable cure instead of proposing common-sense nutritional prevention of disease. The government only sees taxing (cure for deficit) instead of cutting spending (prevention or amelioration) to lower the deficit.

  30. The picture of the car with the tax revolt paint is mine! How cool and exciting, haha!

  31. Yor’re right Chad,

    My bureaucrats will stop by your house later today to help YOU get you’re spending priorities straight.

  32. My only point is that if you take the Bible straight, as I’m sure many of Reasons readers do, you will see a lot of the Old Testament stuff as absolutely insane. Even some cursory knowledge of Hebrew and doing some mathematics and logic will tell you that you really won’t get the full deal by just doing regular skill english reading for those books. In other words, there’s more to the books of the Bible than most will ever grasp. I’m not concerned that Mr. Crumb will go to hell or anything crazy like that! It’s just that he, like many types of religionists, seems to take it literally, take it straight…the Bible’s books were not written by straight laced divinity students in 3 piece suits who white wash religious beliefs as if God made them with clothes on.

  33. My only point is that if you take the Bible straight, as I’m sure many of Reasons readers do, you will see a lot of the Old Testament stuff as absolutely insane. Even some cursory knowledge of Hebrew and doing some mathematics and logic will tell you that you really won’t get the full deal by just doing regular skill english reading for those books. In other words, there’s more to the books of the Bible than most will ever grasp. I’m not concerned that Mr. Crumb will go to hell or anything crazy like that! It’s just that he, like many types of religionists, seems to take it literally, take it straight…the Bible’s books were not written by straight laced divinity students in 3 piece suits who white wash religious beliefs as if God made them with clothes on.

  34. O’reilly has absolutely no idea what hes talking about. His selling point is just being a loud, obnoxious bigot.

  35. I think that’s why it’s really important that people oversee how their government spends “their” money to prevent unnecessary future tax hikes.

    P.S. Please ignore my previous comment which was just meant for testing. Thanks.

  36. I think that’s why it’s really important that people oversee how their government spends “their” money to prevent unnecessary future tax hikes.

    P.S. Please ignore my previous comment which was just meant for testing. Thanks.

  37. All my long comments are blocked… So, thanks…

  38. Thanks. (I can’t post long comments.)

  39. And some people enjoy PCP a great deal. Ketamine is a whole different class of drug. She may well have enjoyed it much more, but I’d guess she wasn’t incredibly bright considering her tree climbing demise.

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  42. Both sides of the aisle are guilty here and I agree 100% that getting the debt under control is going to be perhaps the most important government project over these next 10 years.

  43. For me, though I against extreme taxing…If the government would actually spend OUR MONEY wisely and not on all the “personal favors” that’s going around on the hill…Taxes would not be such a burden…The Govenment NEEDS to be help accountable for every dollar that comes their way…PERIOD!!!!

  44. The spending will continue untill morale improves.

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