Hope for my readers
Posted by Marc Hodak on July 16, 2007 under Invisible trade-offs | 
8 Comments to Read
The pervasive collectivist instinct discussed in certain posts here may seem discouraging to some of you, but take heart. I believe that the future belongs to those who love freedom. The evidence, though all around us, is sometimes disguised as braying by government officials. To wit:
It’s simply unconscionable from an ethics standpoint for this company to go in from this unfair bargaining position…It’s just exploiting a desperate town.
The company in this case is Google; the town is Lenoir, NC; and the complainant is a former North Carolina judge now running for Governor. He’s bellyaching that Google negotiated away most of the taxes they would have to pay as a condition for locating some of its vast computer systems in Lenoir. He’s pandering to residents who feel their town was “bullied into the deal and deprived of potential revenue.” Never mind that “potential” in this case means non-existent. They didn’t have those revenues, and never would if they failed to attract an employer like Google. So, the real complaint is that they had to compete for Google.
Actually, Lenoir did once have those revenues, but they lost them in the competition to keep their previous local industry. Alas, this is not really news. Localities always have to compete, and not just in the U.S. This competition is simply getting more visible, all over the world. That’s economics.
People who lose jobs to competition don’t like the laws of economics any more than people who fall and hurt themselves appreciate the laws of physics. But there is no point pretending they’re not real, or that the government can override them. Economic relationships and consequences are becoming increasingly transparent, to the point that anyone can see them. Eventually, taxation and regulations will be competed down to the lowest level needed to competitively provide essential services. Yes, troubled readers, we may very well be on the path toward libertarian Nirvana. All you have to do is live long enough to see it.
Kat said,
Excellent post, Marc.
As the socialists in America are gaining traction, Europe is undergoing a Reagan revolution. Taxes and socialist institutions are being slashed around the world while air travel and the internet are making physical location all but irrelevant.
In the 20th century, with the world ravaged by two hideous world wars and under communist threat, America’s prosperity and freedom stood alone. It could have a 94% top marginal tax rate and heavy regulation of industry because the alternative countries in the world were poor in comparison. Not anymore. Today, the rest of the world is becoming wealthier, more free, and much more competitive. Even former desserts like Dubai are nice places to live. If the American left wants to make absolutely sure that the American standard of living falls, it should follow the blueprint of Europe’s socialist past. for its money, the rest of the world is following Milton Friedman to prosperity and will leave America in the dust.
Like past immigrants, I will go wherever offers me the best deal. America is an idea, a concept. Once that concept is trampled in favour of revised and reconstituted Marxism, there is no point in staying.
T.J. said,
You think it’s libertarian to redistribute wealth (tax revenues) from individuals to multi-national corporations? I’m on the Lenoir City Council and I voted against these “incentives” because they don’t lead to smaller government. Government will continue to grow, it’s just that individuals will pick up more of the bill than the big corporations. The only libertarian solution is to reduce regulations, laws and taxes for everyone. Government should be neutral on the issues of which businesses should get breaks. Eventually, with the road we’re on, only individuals will pay taxes, while government-created and -sanctioned corporations will pay no tax at all.
Hoople said,
T.J.,
To redistribute wealth, you have to have some wealth to give up. Your town didn’t have those tax dollars. Regardless of what the government “should” do (and I don’t disagree with you, in principle), I think the point here is that government will have no choice. Not just yours.
Kat said,
Is it any surprise that the UN wants to “harmonize” taxes to prevent “unfair tax competition”?
I ran across this this article yesterday.
Why are we still funding this dictator debating society?
M. Hodak said,
TJ – If you look at it a certain way, corporations don’t pay taxes at all now. The corporation is a legal fiction. What is nominally called a “corporate tax” is actually paid by the myriad individuals making up the corporation’s constituencies–shareholders pay it with lower returns; employees pay it with lower wages; customers pay it with higher prices; etc. Ultimately, individuals pay taxes. The only question to be sorted out is the famous who-whom: which individuals to which agencies? Like Hoople, I’m sympathetic to your notion of government neutrality in sorting this out, but the point of this post is that this decision won’t be decided on the chat boards. It will be imposed by competition. For better or worse, you’re right; that’s the road were on.
Kat – The U.S., with a strong central government, would have no hope of establishing tax harmonization among the states. The member states of the EU, which have created transnational structures via enormous effort, have fallen hopelessly short of harmonizing their tax system. I think the day of sovereign nations giving others the right to tax their people is gone.
T.J. said,
I just wish the rest of us elected officials would choose to compete by lowering ALL taxes, laws, rules and regulations instead of offering these tax rebates on the front end while keeping the tax rate high and the rules, regs, “fees” and the like stiff on the middle and back end. But that’s why I’m known as “Councilman No.” I’ll keep tilting at this windmill.
kat said,
Marc,
I do realize that the tax harmonizations is a pipe dream for the UN. It’s just ridiculous that they have it as a goal in the first place.
M. Hodak said,
True enough. And your original question is a good one. When I go by the UN building, I think to myself, “What a waste of prime NY real estate.”