Showing posts with label nothing too much. Show all posts
Showing posts with label nothing too much. Show all posts

Saturday, December 29, 2012

Perhaps The Most Important Argument Against Consumption Taxes

Perhaps the most important argument against consumption taxes is Murray Rothbard's critique of them here, noting their time-preference prejudice:


"The major argument for replacing an income by a consumption tax is that savings would no longer be taxed. A consumption tax, its advocates assert, would tax consumption and not savings. The fact that this argument is generally advanced by free-market economists, in our day mainly by the supply-siders, strikes one immediately as rather peculiar. For individuals on the free market, after all, each decide their own allocation of income to consumption or to savings. This proportion of consumption to savings, as Austrian economics teaches us, is determined by each individual's rate of time preference, the degree by which he prefers present to future goods. For each person is continually allocating his income between consumption now, as against saving to invest in goods that will bring an income in the future. And each person decides the allocation on the basis of his time preference. To say, therefore, that only consumption should be taxed and not savings is to challenge the voluntary preferences and choices of individuals on the free market, and to say that they are saving far too little and consuming too much, and therefore that taxes on savings should be removed and all the burdens placed on present as compared to future consumption. But to do that is to challenge free-market expressions of time preference, and to advocate government coercion to forcibly alter the expression of those preferences, so as to coerce a higher saving-to-consumption ratio than desired by free individuals."

Rothbard goes on to ascribe this prejudice to "Calvinism", which may be entertaining to the libertarian who is interested in wine, women and song now and has a devil may care attitude about present frugality as a defense against want later. But this assumes there is no moral difference between savings and consumption, which there certainly is when the penniless old man turns up on your doorstep, hat in hand. The libertarian has his own time preference prejudice, were he to admit it, which life teaches us has serious consequences, more often than not.

Be that as it may, it is important to recognize that standard measurements of economic activity in the United States have for some time shown, in something like the following formulation, that "70% of GDP consists in consumer spending", and were it not for schemes like Social Security and Medicare there would be far more ringing of the bell going on at the front. This is quite a remarkable fact in a supposedly Calvinist civilization, a fact which argues for the moral superiority of savings over consumption because despite our better natures we in reality live otherwise. This suggests that we still ought to do everything we can to encourage the former and punish the latter, for the simple reason which the observation of human nature teaches. We are mixtures of good and evil, but unfortunately too often it turns out to be a bad mixture.

The ancient Greeks, among other things, notably taught us "nothing too much", by which we may infer that the preponderance of present spendthrifts demonstrates individual and social excess which ought to be remedied by tax policy encouraging the increase of savers. To right the ship would mean achieving a better balance between the two, and to Rothbard's main point, which is that under a consumption tax savings would inevitably be taxed in the long run anyway just as consumption is in the present because that is what savings becomes, we therefore ought to have no compunction about taxing savings in the end. That is what the death tax accomplishes, the final message to an excess of savings.

In the present context this recommends taxation of consumption in some form to encourage marginally less of it, better mechanisms of rewarding savings of which we have too little, and a death tax which approximates the same level as a consumption tax would operate at. This means that draconian schemes of estate confiscation by the government at death are in principle unjust because as consumption taxes we would never think of imposing similar levies on the living.

Unless, of course, we subscribe to The New Republic.

Monday, December 10, 2012

Memo To Jim DeMint And Heritage Foundation: Limited Government, Conservative v. Libertarian

Memo To Senator Jim DeMint and The Heritage Foundation:

Conservatives and libertarians DO NOT share the same understanding of limited government.

Libertarians believe in limited government in order to be free to do anything they want, as long as it doesn't hurt anybody.

Conservatives believe in limited government as the larger, necessary and inevitable political expression of the moral limitations they place on themselves as individuals who respect the laws of Nature and of Nature's God, transgressions against which hurt others and especially the individual whether he recognizes it or not.

Limited government can only exist where there is self-limitation pre-existing. It cannot be voted into existence.

It begins with the personal moral experience of a conversion taught variously in human experience, but well-expressed by the ancient Greek maxim "Nothing too much". We know it more vaguely in our time, for example, as conservation and good stewardship of resources as opposed to relentless consumption and production, or as savings and thrift in economics as opposed to repeatedly rehypothicated credit and debt, or as abstinence outside of marriage and fidelity within it, or in law as a scale of punishment of infractions against these appropriate to their severity.

Libertarians can know these things only because conservatives have told them, otherwise they do not have it in them, deluded as they are that the possibilities in life are infinite. Libertarianism is thus an infantile idea from which one should grow up. 

Monday, August 30, 2010

Set 'Em Up, Joe

A glass of wine a day is better for longevity than none (and better than the whole bottle), according to a new study following out-patients aged 55-65:

1,824 participants were followed for 20 years. ... Just over 69% of the never-drinkers died during the 20 years, 60% of the heavy drinkers died and only 41% of moderate drinkers died.

Read all about it, here.