Fred Schnaubelt

What Is the Purpose of Taxes?                               Printed in San Diego Daily Transcript Jan. 4, 2011

The Wall Street Journal asked, "What are taxes for?" What's your opinion?

When I was on the City Council in the early 1980s a La Jolla doctor testified taxes were for funding his son's "free" sailing lessons. Otherwise he could not learn to sail. (I'm not making this up). The city at the time owned a flotilla of small sailboats on Mission Bay.

Aircraft owners, after Prop 13 passed, testified the purpose of taxes was to subsidize city airports and the tie-down fees for parking their planes. Golfers, quite belligerently testified they paid taxes so Torrey Pines golf fees would remain 90 percent lower than comparable world-class courses.

The Chamber of Commerce wanted other people's taxes to subsidize its new motion picture bureau, downtown redevelopment and a new convention center benefiting downtown members. It successfully convinced the City Council that convention center hotels should be subsidized by the Transient Occupancy Taxes paid by all hotels/motels not located downtown.

Patrons of the opera, symphony and ballet are absolutely certain the purpose of taxes is to sustain the arts (so $18 of every ticket price at the time was paid for by someone else).

Chargers and Padres fans said heck, if you're gonna subsidize the arts we want our share of the fishes and the loaves -- with billionaire owners and millionaire players egging them on. Talk about "Welfare Kings!" Oh, and to spread the wealth, 54 cents each of millions of admission tickets in the 1980s was paid by the city.

Trolley supporters (who wanted people off "their" freeways) thought the thrill of viewing empty new red trolley cars is why people pay taxes. Most adamant of all were the Friends of the Library who "demanded" taxes be used to provide free books, videos, magazines and movies. Imagine the money they could raise if the 600,000 "Friends" paid a nominal $10 yearly for the 10 million books and video games available to them. Heresy!

People who build, manage, promote or occupy public housing have no doubt the purpose of taxes is to provide "brand new" housing at three times the cost of private apartments so households lacking education or work experience can live splendidly beyond their means.

Attorneys, of course, believe the purpose of taxes is to provide free courts so they can make gobs of money. However, others maintain an even higher constitutional purpose of taxation is to provide for the "common defense" even if it means paying $737 million for every stealth B-2 Bomber. Indefensible!

Don't forget the whole social services industry. It selflessly(?) "feels" the true purpose of taxes is to pay social workers to evaluate, investigate, manipulate and inform welfare recipients of their unmet entitlements. This, despite studies showing over 60 percent of money intended for those needing help goes to administration. Real estate brokers say no way -- the real purpose is to subsidize FHA and VA loans so they can sell more homes.

School teachers, at least in California, appear to believe nearly 100 percent of all taxes should go to pay their salaries cleverly stating "it's for the children" and lack of higher pay is why so many kids cannot read or write. Our university students apparently are taught the purpose of taxes (along with those rioting in England last month) is to provide practically a free higher education with only token tuition.

Self proclaimed "Saviors of the Earth" believe the purpose of taxes is to save every creature that walks, crawls or flies even when it costs over a million dollars each for checkerspot butterflies saved in the Highway 125 right-away. No Darwinian survival of the fittest BS for them!

Most recently large numbers of people have maintained the purpose of taxes is to have other people pay their medical and prescription drug bills. Universal "free" care they call it.

The IRS reported 47 percent of those filing 2009 tax returns paid no "income taxes" and still some argue the purposes of taxes is to pay the nearly 26 million nonpayers over $57 billion in "Earned Income Tax Credit" refunds (which weren't "earned" at all). Presumably these nonpayers are those favoring increased taxes for other people when polled. Treasury Secretary Timothy Geithner, Charles Rangel, Tom Daschle and Al Franken make it appear high ranking Democrats favor higher taxes because they have no intention of paying them (until caught).

Then we have a new group of billionaires who say don't look at us, we favor raising income taxes. Renowned economist Tom Sowell points out however, that income and wealth are not the same thing "and they still would be billionaires if taxes took 100 percent of their current income."

Government employees like to echo Justice Oliver Wendell Holmes, "Taxes are the price we pay for a civilized society ..." Our seventh Vice President John Calhoun, however, pointed out government employees pay no taxes. There are two great classes he wrote: net payers of taxes and net recipients. If employees are paid from tax collections it's the taxpayers in reality who pay both the government employees' salaries -- and their taxes -- regardless of what's filed on 1040 tax forms.

Frederic Bastiat noted, "Government is the great fiction, through which everybody endeavors to live at the expense of everybody else." Is it any wonder we're facing a crisis of government?

No doubt many reading this believe it's only fair to tax the employers/creators/producers in society and redistribute their wealth to the takers. The more successful producers become in satisfying consumers, the more their success should be punished by higher taxes. Please note: Income is "earned" not distributed. Notice too those demanding redistribution want it taken from people who earn more money -- never taken from themselves for those earning less.

It almost makes you want to sit down and cry how by constantly bribing voters, politicians are changing the character of the American people from one of self reliance and voluntary exchange to one of "gimee, gimee, gimee" with nearly half now paying no "income tax" at all.

So with many government services being cut, what do you believe is the purpose of taxes?

                                                      Schnaubelt, president of Citizens for Private Property Rights, has been a commercial real estate broker for 35 years
                                                      and was a San Diego city councilman from 1977-81.

                                                      DISCLOSURE: Ideas expressed in my last 70 San Diego Daily Transcript columns are derived from the wisdom of Nobel Laureates
                                                      Milton Friedman and F.A. Hayek plus Ludwig von Mises, Carl Menger, Bernard Siegan, Ben Rogge, Leonard Read, Thomas Sowell,
                                                      Walter Williams, Peggy Noonan, Murray Rothbard, Henry Hazlitt, Ayn Rand, Fyodor Dostoevsky and Dale Carnegie. Not original by me
                                                      feel free to forward with or without credit as Leonard Read, Harry Truman and Ronald Reagan noted:  Good ideas can travel far when
                                                      no one claims credit.  Fred Schnaubelt

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