"The power to tax involves the power to destroy," wrote then-Chief Justice John Marshall in 1819. The man lacked vision. As we've seen time and again, and was emphasized this month with all of the subtlety of Joe Biden on a bender, government can destroy in all sorts of ways beyond taxation. In fact, everything the coercive and yet incompetent institution touches is put immediately at risk of collective disaster from stupid or petulant political decisions.
Marshall's quote, unsurprisingly, isn't the U.S. government's favorite bon mot regarding taxation. The Internal Revenue Service prefers "Taxes are what we pay for civilized society," penned by Oliver Wendell Holmes, Jr. in 1927. With an eye toward upbeat marketing, the IRS bypassed Marshall and inscribed a version of Holmes' sentiment on the exterior of its headquarters in D.C. Undoubtedly, the nation's tax collectors really didn't want to draw attention to the rest of Marshall's ruling, in which he found taxation so dangerous that the federal government must be shielded from state exactions lest it be…well…destroyed.
The rest of us are on our own.
We're on our own in dealing with the rest of the federal government's power to destroy, too. And, wow, have we received a recent reminder of government officials' ability to kneecap the world around them in ways both malicious and incompetent.
With the almost/sort of/partial shutdown, we saw Congress and the White House engage in a belated slap fight over borrowing, taxing, and spending policy that culminated in the brief furlough of federal workers and discontinuation of "services" to the American public. Some of those suspended services, such parks and businesses on leased federal land, were privately managed or self-funding and were supposed to be immune to financial shenanigans in D.C. They were shuttered only to inflict pain as part of the political game. Other "services," were actually impositions by the federal government requiring people to ask, mother-may-I, before going about their business. Employers, breweries, and fishermen don't need government permission to function, but they're required by regulations to wait on officials' pleasure before acting, even if the government has decided to sulk in the corner for a couple of weeks until it's allowed to run up the credit cards.
The theatrical closure of services and the dependent status to which government has reduced so many people destroyed opportunity, prosperity, and irreplaceable time and pleasure in people's lives.
The shutdown was "resolved" by suspending limits on the federal government's ability to borrow money until February 7, 2014. The Treasury Department promptly ran up the tab another $328 billion in one day, raising the national debt to $17.076 trillion in a process that even the Congressional Budget Office calls "unsustainable." With spending expected to outstrip revenues for decades to come, inflicting a burden on Americans not yet born, government has demonstrated the astounding ability to destroy the future!
The simultaneous rollout of the Affordable Care Act "Obamacare" exchanges provides another dramatic example of why we should be happy there's no federal Department of Wet Dreams. At a cost of something on the order of $500 million, the federal government built a website to help people shop for health insurance that they are required by law, under pain of fines, to purchase. The website and its dozens of exchanges don't work. They don't work because, with those hundreds of millions, the federal government bought really bad design and implementation. They don't work so impressively that when the press actually came up with a living person who claimed to have successfully enrolled in a health plan using the exchanges, Reason's Peter Suderman exposed the story as bogus.
The blown rollout of Obamacare destroyed not just wealth, political promises and the expectations of those remaining starry-eyed believers in tax-supported unicorns, it may also destroy an already damaged health care system. The Affordable Care Act mandates health coverage for all Americans, and imposes a litany of regulations with which most existing health plans don't comply. That means lots of people are expected to purchase new, compliant, coverage through the Obamacare exchanges. That don't work.
As Jeffrey Young, health care reporter for the Huffington Post, writes, "anyone who isn't able to get coverage because of the exchanges' problems could confront the prospect of tax penalties through no fault of their own."
Penalizing people for not complying with a law with which the goverment has made it impossible to comply is destructiveness raised to a level of evil genius. (White House flak Jay Carney says this won't happen. We'll see.)
Then again, if somebody finally does get the Obamacare exchanges working and conscripted customers are able to shop for their or-else options, people will find that the law hikes the cost of health coverage for Americans in 45 out of the 50 states in return for a strictly limited, behind-the-Iron Curtain-quality selection of doctors and hospitals. One large provider, Wellpoint, plans to cut by as much as half the number of physicians available on plans it offers through the exchanges.
That's just October of 2013. Which isn't over, yet. And we haven't even addressed drone killings, no-knock raids, or those little temper tantrums known as wars of aggression.
Yes, the power to tax does indeed involve the power to destroy. But John Marshall should have thought bigger. Taxation isn't the only hammer government officials can swing when they get a hankering to smash.