The Cypriots are at it Again

Good thing I held off making this post just a little longer.  Almost immediately after I posted The Immoral Equivalence of All Taxes and had a sigh of relief as it appeared the bank deposit confiscation tax in Cyprus would not go through, news broke that bank accounts would in fact be taxed.  The new proposal is even more confiscatory than the original, at least for some.  It calls for a nearly 40% tax on all bank deposits greater than €100,000, with the possibility of an additional 20% tax on top of that.

I have already commented on the immoral nature of this tax–and all others– in the previous post.  What is important to note here is another theme that plays itself all too often: the majority of the Cypriot population has been exempted from this tax, instead placing the entire burden on wealthier individuals.  While I am, of course, completely opposed to any individual having his or her wealth forcibly extracted, the trend of class warfare is present all across the world.  When widespread protests and demonstrations made it clear that the bank tax would not be accepted by the masses, the target shifted to a smaller demographic.  With the burden of the tax being removed from the masses and saddled on the minority there are no more outraged demonstrators.  As long as it happens to someone else, most people sit idly.  

The Immoral Equivalence of All Taxes

Last week, news broke that the small island country of Cyprus was considering enacting a tax on the wealth stored in all bank accounts as a means of enticing the European Union to bail out its failing banking sector.  The original proposal from the European Union called for a tax of 9.9% on all bank accounts larger than €100,000 and 6.75% on all accounts smaller than that.  The response was immediate and predictable.  Cypriots took to the street in protest, an outpouring that ultimately led to the rejection of the taxes in the Cypriot parliament.  The methods by which the bankrupt country will orchestrate and pay for the EU bailout still remains to be seen.

Political commentators in the media immediately began asking the question “Could this ever happen here?”, with the assumption that this type of tax on bank accounts to fund a government program amounted to nothing more than theft.  This assumption, I believe, is correct; but it misses the forest for the trees.  While it is clear that forcibly extracting a certain percentage of one’s wealth from their bank account is an act of theft, what is it about this tax that is more morally dubious than any other type of tax?  There is nothing inherently different between the ‘outrageous’ Cypriot bank tax and our accepted and glorified progressive income tax, for example.  In both cases, the government believes it has the right to your money (ie. your property); that it has the authority and the power to extract whatever amount it deems necessary (or at least, politically viable).  The only real difference between the two (and it is not a meaningful one), is the point at which the theft occurs: before it hits your bank account or after it hits your bank account.  

While the outrage over the bank tax proposal was completely justifiable, identifying it as a tax that amounts to theft while not also calling all forms of taxation theft is completely inconsistent.  The intellectual debate over the morality of taxes should not start with the confiscation of bank deposits.  Along with the governments of many developed countries, it is the concept of taxation itself that is morally bankrupt and in need of outrage and protest.  While the Cypriot bank tax seems to have been taken off the table, the fact that it was even considered indicates the perceived scope of government power: limitless.  So long as the government thinks it will get away with something it will do it, constitutional restraints be damned.  Luckily in this case, it was not something that it could get away with.     

Pope Francis and Economics

The Catholic Church has an unfortunate record on supporting active government intervention into the economy as a means of attempting to bring about a more equitable society.  While denouncing socialism and communism by name, the Church has nevertheless lent its support to progressive economic policies and an expansive state to carry them out as a solution to poverty in both third world and developed countries.  Within the United States in particular and across the world in general, the alliance between the left and the Church on economic issues has helped to destroy the concept of subsidiarity by transferring the care of the poor and vulnerable from an obligatory act of personal charity to the mere entitlement of a large social welfare state.  In its attempt to bring about aid for the poor, these types of policies not only fail to produce a more just society, they have also led to the strengthening of a state apparatus with a social agenda that is counter to the Church’s moral beliefs.

The problem with the Church’s support for economic welfare policies such as (but not limited to) the ‘living wage’, ‘fair trade’, special collective bargaining rights is that it obfuscates the normative and positive elements of economics, and in doing so attempts to use desired moral outcomes to justify programs whose intentions are to bring that outcome about.  As Tom Woods outlines in his book The Church and the Market, however, the Church’s authority to dictate desired social outcomes does not extend to declaring that certain coercive government programs are an effective way to bring them about.  

With Pope Francis assuming the role as head of the Chruch, there are obvious questions about the type of leader he will be.  As a Jesuit from South America there is reason to be suspicious about the role the new Pope will see for state actors to play in providing charity for the poor.  However Rev. Robert Sirico, author of the highly recommended book Defending the Free Market: The Moral Case for a Free Economy, had this to say about the new head of the Church

Pope Francis is a man of great spirituality who is known for his commitment to doctrinal orthodoxy as well as for his simplicity of life.  Like Benedict XVI, he combines concern for the poor with an insistence that it’s not the Church’s responsibility to be a political actor or to prescribe precise solutions to economic problems. In that regard, he’s a model for all Catholic bishops and clergy throughout the world.

While it is unlikely that Francis will mark a dramatic shift towards restoring the obligation of charity to the individual and accepting the positive deductions (as opposed to the normative desires) of economics, there is hope at least that the Church will not continue further down the road it has long traveled. 

Fitness, Health, and Liberty

Video

This lecture given by Dr. Doug McGuff is one of the most informative overviews of how we got into our current healthcare mess, the effects of Obamacare, and how to avoid being sucked into this medical abyss that I have ever seen. While it is somewhat lengthy (coming in at a little over an hour long), it is still a must-watch. While economics is often condemned as involving a decision-making process in the pursuit of only profit, Dr. McGuff explains that 1.) there is nothing ‘capitalistic’ about our medical system; and 2.) that doctor’s are faced without enormous non-monetary incentives that lead them make decisions that may not be in the patients best long-term interests. It is not the fault of individual doctors themselves, but the creation of a top-down medical system continues to create problems that are only exacerbated over time.

Watch this video. As Dr. McGuff explains, everyone’s best path is to avoid the healthcare morass is to “stay out of the belly of the beast”. Lifestyle choices are ours and ours alone.

The Washington Monument Syndrome

Even before the sequester “cuts” began to be implemented, cries of horror and apocalypse could be heard from all corners of the government. (And yes, let’s again begin by clarifying that there are actually zero cuts in spending, only negligible reductions in the rate of already-assumed increases of spending).  There is no need nor enough space to document the supposed atrocities that will take place now because of these cuts, just turn on the the news if you wish to hear the devastation.  In the wake of the hysteria, however, it is important to keep in mind what programs or services are actually being cut, and why you think it were those programs in particular that were chosen.

Enter, the Washington Monument Syndrome: whenever the government is forced to make changes to its spending patterns (aka- to adjust to small decreases in their annual budget raises) it will be sure to inflict the most amount of pain or frustration as possible when deciding what adjustments it will make.

This phenomenon has been repeated regularly as the Washington Monument is threatened to be closed to visitors, National Parks will be shut down, lines at airports will be unbearably long without as many TSA agents on staff, and agencies will be forced to decide whether they will support sick children or poor children.  It is an old trick, and it is an absurd trick.  The proposition that there is no waste within the government that does not directly affect everyday activities is preposterous.  The same technique is used by school districts when their levies fail.  The first thing to go are school buses and athletics, never mind the largess passed out to employees through salary and benefits procured by government sponsored unions.

While hopefully people will start to wake up and see the racket for what it is, I did find it amusing that the White House has cancelled its tours of the building.  On the same webpage discussing the cancellations (due to the sequester), there is also information about how to volunteer to help run the White House tours.  The fact is, nearly every person involved in the running of White House tours are volunteers….isn’t it strange that the tours were the first thing the administration decided to shut down?

“Two men didn’t become President. Only one was defeated”

Chris Rossini of EconomicPolicyJournal.com recently made this important insight into the character of the final two Republican nominees for the presidency: Mitt Romney and Ron Paul.  The differences between the character and ambition of Ron Paul and his fellow opponents vying for the White House were readily apparent throughout the campaign.  While there is no doubt that both Romney and Paul (among others) tirelessly worked the campaign circuit, the different responses in the aftermath of defeat certainly shed light onto intentions behind each seeking the White House.

Since the election, Ron Paul has revved up his educational engine by leaving government in the dust and hitting the road by finding new and unique ways to promote the message of liberty.  Instead of backing down and hiding after an electoral defeat, Paul has become even more brazen in his stances (is that possible?) and has embarked upon a path that will continue to spread the ideas and principles that he stood for.  It was not the power that he was after; merely a platform by which he could continue to educate others.

Contrast this Mitt Romney, who until this week had not been heard from since the immediate aftermath of his electoral loss.  While it may be common practice for the defeated candidate to stay out of the spotlight after an election, this only further serves to make my point.  Romney, et al. are not interested in bringing a real, principled philosophy to government.  They are interested in the power they can attain and the ways they can use it to give the spoils of victory to their backers.  

There is a fundamental difference here between two men who have had the following to say about leaving government:

“I certainly don’t miss congress”

and

“It kills me not to be in there, to be in the White House.”

I’ll let you figure out who said which.  It should be clear “Two men didn’t become President. Only one was defeated.”