Massachusetts senatorial candidate Elizabeth Warren made big waves this week with a statement she gave regarding government services, taxation and the social contract. Mrs. Warren asserted that:
“There is nobody in this country who got rich on his own. Nobody. You built a factory out there — good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did. Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”
Warren correctly points out that people who operate businesses rely on the government to provide certain services, but I believe her assertion about an individual’s obligation to pay more in taxes is based on a narrow worldview that makes too many incorrect assumptions about the disposition and abilities of our government.
The first thing we need to do when we talk about paying our fair share of taxes is to take off Warren’s rose-tinted glasses and examine both the positive and negative things the government does with our tax money. Yes, Warren loves to tell us about how the government uses our income to fund education and infrastructure, but she conveniently forgets to mention that last year the government spent $663.7 billion (18.74 percent of the 2010 federal budget) of our taxes on the Department of Defense so we could operate 737 military installations across the globe and continue funding the occupation of Iraq and Afghanistan for the seventh and ninth respective years. Similarly, the government continues to spend our tax dollars on the war on drugs, which it has been losing since 1971. Currently, the government spends billions of our tax dollars on the Environmental Protection Agency in an attempt to curb pollution, and then spends billions more to subsidize the oil industry that causes so much pollution in the first place.
The message to take away from all this is that for every nice thing the government does with our tax dollars, it also does quite a few not-so-nice things. Yes, the government builds classrooms for kids, but it also builds holding cells in Guantanamo Bay. Yes, the government spends our tax dollars to police the streets and keep us safe, but the government also spends our tax dollars on the TSA so we can be groped for the sake of security while waiting in line at the airport. Yes, the federal government built the interstate highway system in the middle of the last century, but it also sent thousands of Japanese-Americans to internment camps. The next time Warren tells you it’s your societal obligation to pay your taxes forward, think long and hard about where your money will actually end up.
But for the sake of argument, let’s pretend the government only spends our tax money on nice things like schools, roads and firefighters. All too often, we forget to ask ourselves if the government is actually any good at doing these things, and, if so, at what cost?
Let’s talk education. It’s no secret that America’s public school system is not up to speed. It’s also no secret that America’s private schools largely outperform our public schools run by the government. Many say that this is because the public schools are under-funded and would perform much better if only they had deeper pockets, but a quick thought experiment quickly clears up this misconception. Imagine you had the choice of sending your hypothetical child to either a public school or a private school, on the condition that each school had the same amount of money to spend educating your child. Dollar for dollar, the private school always wins because the people who run the private school have a vested interest in doing their job well. In the private school, providing a top-notch education means more profits, whereas in the public school — where revenue is not dependent on the quality of the services rendered — it just means more work.
Just as private schools outperform public schools, privately owned toll roads outperform pothole-ridden public roads because of the profit motive. Similarly, government operated police and fire units are easily replaced by volunteer organizations. In fact, volunteer fire departments have a special place in American history: Benjamin Franklin himself helped organize one of America’s first volunteer fire departments in Philadelphia. Volunteer police also exist in America in the form of neighborhood watch groups, the only cost of which is the time donated by their participants. (Yes, there are many important details as to how a volunteer police force would function, but that is in itself an article for another day.)
As Warren’s words continue to reverberate in the media, we must remember that, at the end of the day, her goal is to get elected to the senate. And if that goal requires her to paint a fanciful picture of a competent, well-meaning government, it’s simply one more reason not to trust her — or anyone involved with the government, for that matter — with our hard-earned tax dollars.
Dennis Wassem is a third-year economics major.