Posted on 05/13/2003 11:52:06 AM PDT by hsmomx3
The National Center for Policy Analysis estimates that the average American household's share of the cost of government is about $19,000 per year. That astonishing number does not include regulatory costs, which are estimated to be another $7,000 per year.
So why aren't Americans grabbing their pitchforks and overthrowing their political overlords, or at least voting en masse to rollback government spending and regulations? There are three reasons.
First, much of the cost of government is hidden in the price of products and services and thus paid indirectly by consumers in higher prices and not directly in taxes.
This brings to mind an old cartoon that appeared in the Albuquerque Journal. A couple of guys are sitting in a coffee shop reading a newspaper headline about a new tax program. One of them says, "This new tax plan sounds pretty good. We get a 9% cut and business picks up the burden." Next door is a small grocery store. The proprietor has an advertising poster in his hands. Printed on the poster is the price of bread: $1.00. He has crossed out the price and written in the new price: $1.09.
The second reason that Americans aren't voting en masse to cut government is that much of what they pay directly in income taxes, property taxes and sales taxes goes unnoticed. For example, income taxes and FICA taxes are taken from employees' earnings before they get paid, through the nefarious process called withholding. If employees had to write a check to the government for the taxes after they got paid, as the self-employed do, there would be a run on pitchforks at the local Home Depot.
Property taxes also go unnoticed for most Americans. For example, renters do not know how much of their rent goes to pay the property taxes on their apartment. Similarly, homeowners with mortgages do not notice how much they pay in property taxes. Because the mortgage company writes the check to the county assessor, the homeowner only remembers the total house payment that he makes each month to the mortgage company.
Most people are also not aware of what they pay in sales taxes, because when an item is purchased, the taxes go unnoticed in the final bill.
The third reason that Americans aren't voting en masse to cut government is that a majority of them are dependent on the government for all or part of their income. They are not about to vote to have their rice bowl taken away.
The obvious recipients of government money include the 51 million Social Security recipients, the nation's 21 million government workers (who outnumber wealth-producing manufacturing workers by 4.3 million), and the tens of millions of Americans who receive various subsidies and welfare payments. Social Security recipients and government workers alone account for 35 percent of the voting-age population.
Less obvious are the millions of private-sector lawyers, consultants, managers and clerks who have a vested interest in the regulatory state. Many of them are conservatives who rail against big government but who would never vote in the privacy of the voting booth to abolish the source of their livelihood.
Let's look at some examples, starting with lawyers.
There are 681,000 lawyers in American. Three-fourths of them, or 510,000, work in private industry. They are represented by the powerful special-interest group, the American Bar Association.
Lawyers are assisted by 188,000 paralegals, who are members of one or more of the following special-interest groups: the National Association of Legal Assistants, the National Federation of Paralegal Associates, and the American Association for Paralegal Education.
Clearly, it is not in the self-interest of lawyers and paralegals for the nation to have fewer laws and regulations.
Similarly, it is not in the self-interest of the nearly 3 million accountants, auditors, bookkeepers and accounting clerks to shrink the 48,000 pages of tax regulations. Their self-interest is protected by the American Institute of Certified Public Accountants, the Institute of Internal Auditors, and the Institute of Management Accountants.
The protection racket pays off. Ten percent of all tax revenue, or $200 billion, is spent annually on federal tax compliance. And half of taxpayers have a professional tax preparer prepare their tax returns, up from 20 percent of taxpayers 40 years ago.
Another profession that has a vested interest in the regulatory state is the human resources profession. Consisting of about 500,000 human resources managers and clerks, this profession has grown in lockstep with the growth in laws and regulations that govern the work place. The largest human resources association is the Society for Human Resources Management, with 130,000 members.
Even private social workers have a stake in big government. Of the 468,000 social workers, two-thirds, or 308,000, work in the private sector. Many are employed by charities and nonprofit organizations that subcontract with the government to deliver mandated services. As such, they aggressively oppose cuts in government spending.
Looking out for the interests of social workers are the National Association of Social Workers, the Council on Social Work Education, and the Association of Social Work Boards.
These are just the tip of a huge iceberg. Name a safety, health or environmental regulation, and you will find scores of private-sector workers who are dependent on the regulation for their livelihood.
Take the 100,000 pages of regulations that govern the Medicare program. The majority of the regulations pertain to price controls and paperwork, not to patient care. The regulations have spawned armies of clerks who toil in hospitals, doctor offices and insurance companies to keep their employers in compliance. The regulations also have spawned an industry of consultants and software companies that sell expensive services and computer systems to keep health care providers out of trouble.
One final example: 401(k) plans. The average American has been led to believe that the government is being benevolent by letting employees set aside part of their pay in a tax-deferred, employer-sponsored retirement plan. The government is not being benevolent at all. It is being coercive. It is dictating how much people can save on a tax-free basis for their old age. A less coercive government would allow people to save as much of their earnings as they wanted and to defer taxes on the savings until after they retired. The increased savings would be good for people and for the economy.
But coercion never produces a long-term good. In the case of 401(k) plans, it has produced a plethora of 401(k) regulations, which, in turn, have produced a plethora of pension attorneys, benefits consultants, software companies and human resources managers and clerks -- all of whom have a vested interest in seeing that the coercion continues. The cost of all of this administration comes out of the pockets of the very people that the government is pretending to help.
Can government be cut? No! The nation has passed the tax tipping point. That is the point where the majority of Americans either have a vested interest in the regulatory state or do not know what they are paying to support the state.
If you own a pitchfork, sell it.
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Mr. Cantoni is an author, columnist and founder of Honest Americans Against Legal Theft (HAALT). He can be reached at ccan2@aol.com.
Comments?
Oh well, tomorrow is a new day, a new jug.
As you rip the Feds, and they deserve it, what can be done about FICA, MEDICARE, STATE, COUNTY, and CITY? Not to mention the huge bureaucratic nightmare that is our medical and overall insurance systems. We are doomed.
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