Government-Funded Do-Gooding – the curse of the modern age

Have you ever wondered how do-gooders without money, without power, do good to others? They get government to fund their do-gooding by expropriating funds from other people. What does everyone else get? We get a myriad of government programs with negative consequences. These sanctimonious pseudo-helpers create a death spiral for both taxpayers and those they profess to bless.

How do do-gooders get away with this? Do-gooders swathe themselves in a shroud of good intentions. For example, what happens when do-gooders lobby for the creation of government programs to help the poor. Taxes go up but even more destructive, people end up in poverty for the long term.

According to a Cato Institute study, The Work vs Welfare Tradeoff (2013), welfare beneficiaries in Wyoming earned $33,119 annually. With a state median salary of $36,130, these generous benefits create a “welfare cliff” encouraging low-income individuals to stay out of the workforce. But as the study confirms, a job is the best way out of poverty. 

The shroud clouds misleading methods so it should come as no surprise that these illusory good intentions lead to bad results.

But does this mean helping people a bad idea or are the means used by modern do-gooders the problem?

Let’s look at how this works. When a person wants to help someone he can do it in one of two ways. The old-fashioned way is to help someone directly using one’s own funds. In this situation, doing good is secondary to living a productive life. The giver gives his own money voluntarily. The idea is to help a person through a short-term time of difficulty. The idea is for the recipient to become more self-reliant. The idea is a hand up, not a hand out.

The modern way is fundamentally different. In this situation, the giver lacks his own funds and must get the funds somehow as he considers doing good his primary justification for existence. How is this do-gooder able to get the money he doesn’t have? He uses the power of government. Politicians are more than happy to help do-gooderize the victims.

That politicians give other people’s money away is not exactly news. How does this work together with the do-gooder’s primary justification for existence? Politicians are more than happy raid people’s wallets to help the poor because this help gives politicians unlimited taxing power. Medicaid alone cost Wyoming taxpayers about $260 million in 2015, for example.

What else happens when do-gooders use the power of government to do good to others?

After all, do-gooders need people to do good to. Do-gooders pervert their victim’s self-reliance, initiative and independence to create the dependent class necessary for the do-gooder to justify his existence. Do-gooders work to perpetuate dependency – they draw people into a dependent lifestyle. Politicians are happy to help because this creates a dependent voting heavily motivated to vote for glad handing politicians.

The results confront us every day. Anti-poverty activists, bureaucrats and philanthropists have increased welfare state programs to both capture funds from the productive and to draw the needy into a web of dependency. Do-gooders take both people’s money and people’s self-reliance.

Let’s take this to its logical conclusion.

The 20^th Century has given us quite a few examples of how using one group to benefit another leads to a government policy oppression and how this has resulted in the starvation and murder of millions. One very evil man, such as a Hitler or Stalin, can’t do it all by himself. They need the help of do-gooders and their shroud of do-gooding to kick of their programs of oppression. 

But the ‘ends justifies the means’ mentality is not exactly new. And when the ‘ends’ are the greater good, justified by whatever means, we can get bad results. For example after the slaughter in 1649 of about 30,000 people, including women and children, Oliver Cromwell said to the English Parliament: “I am persuaded that this is a righteous judgment of God upon these barbarous wretches, who have imbued their hands in so much innocent blood and that it will tend to prevent the effusion of blood for the future, which are satisfactory ground for such actions, which otherwise cannot but work remorse and regret.” [Emphasis added by the author.]

Once a person decides that an individual is nothing more than a means to an end of a higher purpose, the tools of a totalitarian society can be unleashed. The complete disregard of the happiness of the individual, spying, and eliminating noisy nonconformists are necessary outcomes. Nothing is prohibited as long as the person means well.  It allows for the violation of the individual for the greater good, however defined.

Love of money might be the root of all evil, but lack of it is the seed. The ends justifies the means ideology has bad consequences because bad means corrupt the ends. Do-gooders and politicians get together because they have the same motives, they seek the same ends, to exists for, through and by others. But each individual is an end in himself, not the means to an end for someone else. In the face of all the atrocities of the 20^th Century, why do do-gooders still support the measures of murders? Because they have been told that the death of millions might ultimately benefit a greater number. The ends justify the means, even if that means murder.

Internet Retail Sales Tax Grab Attempt in Wyoming

In this eight-minute Podcast, Maureen Bader discusses the problems with the Wyoming government's attempt to tax Internet sales in Wyoming, with Glenn Woods on KGAB Radio 650 am in Cheyenne. Politicians use two excuses to justify this tax grab. First, they say they need the money. But the revenue they expect from this tax will in no way cover the shortfall in state funds--the government has a spending problem, not a revenue problem.

Second, they say they want to level the playing field between Main Street and the Internet. If politicians really wanted to help Main Street, they would lower the burden of regulations and taxation on Main Street sellers, not extend the dead hand of government to innovative sellers using technology to assist their sales efforts.

Big government and big business conspire to restrain Internet sales

Adam Smith, the father of modern capitalism, loved the free market system but distrusted businessmen. Back in 1776 he said, "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

Although this no doubt still happens, a more modern version of this phenomenon is big government politicians and big business executives conspiring against small business and the public to destroy competition and raise prices.

As recently as September 2011, Amazon, the giant online retailer, prevented state governments such a California from collecting sales taxes from online retail sales.

That was then.

In November 2011, Sen. Mike Enzi (R-Wyo) introduced The Marketplace Fairness Act, to allow states to collect sales taxes from out-of-state Internet sellers but exempted businesses making less than $500,000 in annual sales.

According to Amazon vice president Paul Misener, only one percent of online sellers sell more than $150,000 annually.

So Sen. Enzi’s bill would exempt 99 per cent of Internet retailers, pretty much everybody except Amazon, and that would be bad for Amazon. But with threats come opportunity and now instead of combatting the Internet retail sales tax, Amazon has jumped onto its bandwagon.

In his testimony to congress Mr. Misener said congress “should authorize the states to require collection, with the great objects of … leveling the playing field for all sellers.” By this he meant congress should not exempt small online businesses from collecting sales taxes in all states. Is that because he really cares about big government’s need to feed its spending addiction with more tax revenue?

Oh no.

Amazon is a big company with lots of lawyers and accountants so can easily absorb the added cost of collecting the spider’s web of sales taxes in 50 different states. Small mom and pop shops, on the other hand, would be forced out of business if they had to take on that additional cost.

Jim Estabrook, a small business owner near Gillette, Wyoming says, “I have had multiple small businesses that have mainly me doing all the work. I do not believe he [Sen. Enzi] understands the nightmare that would be created for dealing with sales tax collected for 49 states. Personally, I would have to spend a lot of time taking care of those requirements for about a month or two. Then I would be out of business because I wouldn't have had any time to sell products or services.”

Destroying competition will certainly help Amazon, but it will hurt small business, hurt the economy and as usual, hurt the consumer.

Who's the fearmongerer now?

How enlightening. The NDP accuses me of fearmongering then turns around and does exactly the same thing. The NDP just doesn't get it, and I'm not the only one who thinks so.

Check this response to NDP Finance Critic Bruce Ralston's attack here

Tax hikes unlikely to fund Dix's spending

"Government is the great fiction through which everybody endeavours to live at the expense of everybody else." -Frederic Bastiat, French political theorist and politician, (1801-1850)

Check out Maureen's article in the Province here

The NDP's hard-left turn promises big spending paid for by corporate tax hikes. It's unlikely, however, to work out as promised. Higher tax rates can bring in lower tax revenue.

Check out the evidence here.

Don't confuse tax rates with tax revenue

People on the left of the political spectrum are often heard complaining about the cut in corporate tax rates. They seem to think that if tax rates are cut, corporations won't be paying "their fair share of taxes." This reasoning shows the confusion between tax rates and tax revenue. When tax rates go up, governments can actually collect less in tax revenue, not more. That's because a tax discourages what it is applied to. If corporate tax rates are high, corporate investment is discouraged. The best way to increase tax revenue is to lower tax rates. This encourages business investment, leading to more economic activity, more job creation and higher government tax revenue.

Lower taxes create the incentive to work, save and invest and B.C.'s experience shows how rate cuts lead to economic growth and higher tax revenue. Income tax rates have decreased since 2001, yet total tax revenue went up.

The B.C. government cut personal income tax rates by 25 per cent in 2001 and 10 per cent in 2007. In 2010, the basic personal exemption rose to $11,000, leaving more money in the pockets of taxpayers at all income levels.

Meanwhile, the government cut corporate income tax rates from 16.5 per cent in 2001 to 10.5 per cent in 2010. Rates are expected to fall to 10 per cent by 2011.

The government also cut small business taxes, from 8.5 per cent in 1999 to 2.5 per cent in 2008. It also increased the amount of small business revenue subject to the lower tax rate, from $400,000 to $500,000.

Yet between 2004 and 2007 personal income tax revenue rose from $5.1 billion to $6.9 billion, corporate income tax revenue rose from $1.3 billion to $2.3 billion and revenue from all taxation rose from $14.9 billion to $19.4 billion, before dropping off because of the economic downturn. 

A growing economy, not high marginal tax rates, increases tax revenue.