Saturday, 16 June 2012

Taxpayers' Money: an Idea Whose Time Should End

     Several years ago, I was involved in an argument on usenet (remember usenet?) with some fellow who was outraged that he was being forced to pay an "illegal religious tax". It seems he'd discovered that many food producers take steps to ensure their food is kosher, which involves having it certified by a rabbi, for which a fee changes hands. Never mind that the fee is tiny, and spread out over thousands upon thousands of bottles of ketchup or pickles or whatever the product happens to be, amounting to a fraction of a cent per unit. Never mind that, by making the food saleable to a larger market, it enables greater economies of scale and might even lower the ultimate retail price of the bottle. This fellow was upset that some of his hard-earned money was going to Jews.
     Now, try as I might, I couldn't persuade him of the difference between a tax (one feature of which is that it's usually imposed by the government, for a start) and a cost of production or marketing. To be sure, I don't think he was interested in rational argument; he just want to vent his antisemitism. But the argument stuck with me over the years as a particularly stupid one, and one I see in a disguised and less obviously stupid form quite commonly. That's why I bristle whenever I hear someone talk about spending "taxpayers' money".

     It's such a common expression, and so apparently uncontroversial, you might be wondering why it should bother me at all. After all, tax money comes from taxpayers, so it makes some intuitive sense to call it taxpayers' money. And people use the expression as a way of emphasizing who that money comes from and why the government has a duty to spend it wisely on their behalf. What's wrong with talking this way, then?
     What's wrong is that it's simply inaccurate. Taxpayers' money no longer belongs to the taxpayers, just like the money you spend on a bottle of ketchup no longer belongs to you. My antisemitic adversary seemed to think that he was entitled to a say as to how Heinz or Kraft spent its revenue, but he was wrong. Of course, if he happened to be a shareholder in a ketchup company, he might have some say in how the company allocated resources, but in his capacity as a customer, no. He got his bottle of ketchup, and that's that. What Heinz spends its money on is none of his business.
     In the same way, as a taxpayer, your money stops being your money when you pay it over to the revenue agency. You have no further claim to it, at least not in your capacity as a taxpayer. You are, in a sense, a shareholder in the collective enterprise of the State, and so yes, in your capacity as a citizen you do have some claim as to how it spends its revenue. But that's as a citizen, not as a taxpayer.

     It may seem like I'm making a big thing out of a minor quibble here, but it is important, because it distorts public discourse in a couple of ways. In large part, this is because we're mistaken on the nature of the tax transaction. We tend to think of it as being forced to pay for roads, schools, hospitals, courts, police, the military and so forth; in other words, we fall into the trap of thinking we're buying these things as taxpayers. We're not. We should not think of the act of paying taxes as a kind of purchase, where we get something in exchange. That imports all sorts of thinking about getting value for your money, which is just inappropriate in the context of taxation, especially since we're used to being able to pick and choose the things we want to buy, and it feels wrong to have to pay for services you never use.
     Well, taxes are not a purchase, at least not in that sense. If they're a purchase of anything, they're a purchase of the privilege of living in a democratic society under the rule of law, and sure, we might not all pay the same dollar cost for that privilege, but we're all subject to the obligation to contribute via taxes in some way. And that is the end of it. You pay your taxes, and the money you pay is no longer yours. It belongs to all of us collectively, and you have one vote as to how we collectively ought to spend it.
      It's perfectly valid to opine, as a citizen, that we ought not to spend so much on this, and we ought to spend more on that, but the arguments to use there should be limited to whether a given expenditure represents a cost-effective allocation of society's scarce resources. Citizens are equal shareholders, and that is how our discourse should proceed. Taxpayers' contributions are not equal, and we should not allow our democratic values to be eroded further in the direction of one dollar, one vote. I'd like to see the word "taxpayer" removed entirely from democratic discourse.

     The "taxpayers' money" argument is simply invalid wherever it appears. Should a pacifist be forced to pay taxes to support the military? Should a vegetarian be forced to pay taxes to support beef inspection? Should stupid people be forced to pay taxes to support schools and libraries? Should criminals be forced to pay taxes to support police? Absolutely any expense that government pays will have someone who opposes it. So what? Opposition is valid, but it should be democratic in nature, not rooted in property claims to money that isn't yours anymore. Don't complain to me about how your money is being spent; persuade me instead that I should be upset about how our money is being spent.


  1. Thank you for this. I had an argument, just before the recent election, with someone who felt that everyone would be better off if fewer taxes were paid so that she would have more money in her budget to spend on things she thought were important. When I told her that I was happy to pay taxes in order to fund the things that my society deems is important, she told me that she thought I was foolish to be willing to pay 'for the abortions of irresponsible people' and other frivolous expenditures. At the same time, she insisted that Catholic schools should be maintained and that churches should be tax exempt because those things are sacred. I must have terrible argument skills, because I was unable to get her to see how her points were rather in conflict with one another.

  2. Further, the concept leads -- has led -- people to take the concept to dangerous extremes. There's at least one case out there of an individual who decided to to pay taxes because he was angry that "his tax dollars" were being used to fund abortions. This is the rhetoric that fuels the de-tax movement and helps spur the underground economy, which hurts all of us ultimately.

    1. Oops. Missed the word "not" in regard to paying taxes. As a note, I believe that individual is facing jail time now. Talk about waste!

  3. ...and as soon as I hit publish I notice that my grammar was flawed. Ooopsie!

  4. Lynne, strictly speaking her points aren't necessarily in conflict with each other. She just thinks that her particular variant of Catholic values should be adopted universally, that everyone should be offended to pay for abortions and happy to pay for Catholic schools. But her points MAY be at odds with fundamental values of democratic pluralism, because they discount opposing views as not worthy of consideration.

    Michael (and Lynne), in fact the current issue in the U.S. about so-called "religious freedom" was also on my mind as I wrote this. One of the objections to President Obama's healthcare reforms is that it forces Catholic employers to pay for contraception for their employees, ostensibly a violation of their religious freedom. I have to say, I think this objection is another example of the same kind of silliness. Employers are required to pay premiums for their employees' health insurance; the money is no longer theirs. If their employees happen to use that funding for something they disapprove of, too frakking bad.

  5. The issue with that whole contraception debate lies in the fact that we're dealing with contracts of insurance. The contents of those contracts is not legally mandated. It just happens that, as a rule, standard health insurance contracts cover contraception as a matter of course because the insurance providers find it MUCH better for their bottom line to provide contraception as opposed to pregnancy care.
    The right wingers were attempting to legislate that part of the contracts out. Irony: supporters of "small government" who want to get rid of as many regulations as possible, except where the regulations involve what consenting adults do in private and what a woman chooses to do with her body, in consultation with her physician.