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Government as Parasite
by Sheldon Richman

The Republicans still don't get it. They say they want a tax cut because
"the surplus is the people's money," but their heart isn't in it. If they
truly believed that, they wouldn't quickly add that we need a tax cut to
avert a recession. They supported the tax cut before there were signs of an
economic slowdown, so why reach for that justification now? Keynes is dead; let's leave him that way.

How do they expect us to believe them when they propose to cut taxes by only a small percentage of the expected budget surplus? The House Republicans voted for an even smaller cut than President Bush proposes. If the surplus is really the people's money, why can't we have it all?

Well, they might say, the government needs the rest of it to do the people's
business. But that's an opening the Democrats can drive a truck through.
They are unfazed when Republicans say it's the people's money. In the
Democrats' view, government is the agency that spends money on behalf of all the people. For them and their constituents, it makes no sense to cut taxes in the name of the people, since it would deprive the government of what it needs to benefit the people. And since about half the income earners in the country pay little or no income taxes, the Democrats will find many sympathetic ears.

If the Republicans wish to counter the Democrats' case, they will have to do it at the bedrock level. When the Democrats say that the surplus is the
people's money and that's why they want to spend it on the people's needs,
the Republicans will need to point out the fundamental problem with that
view. Government doesn't spend the people's money on the people's needs. "The people" consists of separate individuals. Some of them produce wealth and pay taxes. Others produce little or nothing and consume taxes. The government is the transfer machine that moves money from the first group to the second. A tax cut reduces the amount of money transferred from producers to nonproducers. Thus tax-cutting is a matter of simple justice.

It would be nice to hear the Republicans say this. But they can't be too
clear about it. If they were, we might question a lot of things that they
plan to do. For example, if they were to forthrightly condemn the transfer
system, we might question their plan to subsidize faith-based social-service
organizations. Why should the taxpayers be forced to support those groups?
The Bush folks will respond that secular groups are already subsidized and
the Bush plan simply would end discrimination against religious groups doing the same kind of social-welfare work. But there is a better way to end the discrimination: cut off the money to the secular groups. Let people keep
their own money and decide what, if any, social-welfare activities they wish
to contribute to. That's more consistent with Mr. Bush's message that the
money belongs to the people.

He undercuts his message in other ways as well. He favors a prescription
drug subsidy for low-income elderly people. In other words, he wants some
people to be forced to pay for other people's medicine. This will have
serious economic consequences. For example, it will set a precedent for the wider subsidies favored by the Democrats. Worse, it will begin a process that will most likely lead to life-threatening price controls on the
pharmaceutical industry. But the fundamental objection is moral: it will
transfer money from producers to nonproducers. If people want to help others buy medicine, fine. But force is not justified.

If the GOP really wants to sell its tax cut, it will have to explain to the
American people that government doesn't look after "the people's" welfare.
Rather, it helps certain favored groups at the expense of everyone else. It
does so by taxing the wealth of producers in order to subsidize other
people's consumption, depriving the rightful owners of the freedom to
consume or invest as they see fit.

In other words, the Republicans will have to identify the government as the
parasite it is. But can they do that while engaging in parasitism
themselves?

Sheldon Richman is senior fellow at The Future of Freedom Foundation
(www.fff.org) in Fairfax, Va., and editor of Ideas on Liberty magazine.

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