Taxes: An Overview

"In this world nothing can be said to be certain, except death and taxes."

Though not the first to observe this truth, Benjamin Franklin penned this maxim in 1789.  Margaret Mitchell, the author of Gone with the Wind, wrote, "Death, taxes, and childbirth! There's never any convenient time for any of them."

Taxes have been around as long as Government - and in a more cruder form - as long as one human exerted dominance over another.  Other than laws prohibiting individual liberty; taxes are the most intrusive form of Government upon the individual.  

Core Truth Four: Trade Offs are unavoidable

New solutions always come with new problems.

By 1890 New York was running out of space.  There were at least a 150,000 horses living in New York.  Horses transported goods, services, and people throughout the streets, and while so occupied, each put out twenty-two pounds of horse manure each day.  This amounts to 90,000 pounds each month.

The problems caused by such a copious and never-ending amount of horse shit are easy to imagine.  George Waring, Jr., the City's Street Cleaning Commissioner, described the city as stinking "with emanations of putrefying organic matter."  City streets, according to Elizabeth Kolbert, were"literally carpeted with a warm, brown matting . . . smelling to heaven."  Brownstone apartment first floors were up one level to give relief from the smells.  Where lesser amounts of manure had been happily purchased by surrounding farmers - the over abundant supply had produced such a glut, that New York could not give the manure away.  

Core Truth Three: Unintended Consequences

Intentions are not results.

Good intentions do not matter.  

What matters are all of the consequences.

When you combine the truth that Incentives Matter with individuals pursuing their own subjective perceived interest you get our third Core Truth: Unintended Consequences.  Unintended consequences mean that individuals react to laws (or other changes) in ways that were not anticipated by the those imposing the change.  Sometimes the reactions are good, and sometimes the reactions are bad.

Core Truth Two: Incentives Matter

Economists' fundamental principle is "Incentives Matter."  This maxim means that people change their behavior to either obtain perceived benefits or avoid/reduce perceived costs.  If the perceived benefit outweighs the perceived cost - the individual is more likely to assume the cost. If the opposite is the case - the individual will seek ways to avoid or reduce the cost.

Core Truths: Power Corrupts

What are Core Truths?

Core truths are basic beliefs about how the world works.  Based upon these beliefs - other values and policy decisions necessarily follow.  Many Core Truths are shared across the political spectrum adopted by both Liberals and Conservatives.   Conservatives will differ in Liberals in that they will place a greater importance on some or more of these Core Truths.

Core Truth One:  Power Corrupts

In 1887 historian, writer and politician Lord John Dalberg-Acton wrote:

 I cannot accept your canon that we are to judge Pope and King unlike other men, with a favourable presumption that they did no wrong. If there is any presumption it is the other way, against the holders of power, increasing as the power increases. ... Power tends to corrupt, and absolute power corrupts absolutely. (1887)

Basic Political Philosophy: Hobbes & Locke

Ideas and Philosophies that have shaped United States Political Thought

In 1776 the Continental Congress tasked Thomas Jefferson to draft all the reasons justifying our decision to declare independence from Great Britain.    Jefferson, consulting with John Adams, Benjamin Franklin, Robert Livingston and Roger Sherman, wrote the Declaration of Independence - a document that both lays out the eternal relationship between Government and the governed as well as detail the specific contemporary failings of King George.  

Jefferson presents an eloquent manifesto about human nature:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

According to Jefferson, while people are different in abilities, skills, and even social station - each are "equal" with the other in that no person has a greater right to life, freedom, or the  ability to seek out and work for their own vision of success.  

Ideology, Politics and Policy

Setting your ideas to sail!  Translating ideas into winning 

elections,  passing legislation, and creating successful 

policies are not the same thing.

There's a big difference between the three.

Before we talk about what core views and values Conservatives share - it will be helpful to understand the distinction between three concepts:  ideology, politics, and policy.  You may find in debates that people point to political statements, positions as a means to call into question conservative ideology.  

Example:  Deficit spending under Republican President George Bush exploded.  George Bush claims to be a Conservative.  Therefore Conservatives do not believe in fiscal discipline (or Conservatives are hypocrites.

Because the intersection between ideology, politics and policy can get messy - it is important to understand the differences between the three.

Constrained versus Unconstrained Visions

It's not about the facts - it's about the vision.

If you read almost any debate on Facebook, or on YouTube you hopefully see Liberals and Conservatives try to battle over who has better command of the facts.  Liberals are ignorant.  Conservatives are misinformed.  I say hopefully because all too often the debates are mindless accusations of stupidity, racism, malice, and vitriol.

Debaters lament if they could just show the other side the facts - that liberals would become conservatives and vice versa.  However in the ideological debate between people it is often not about the facts, but it comes down to a difference between vision.  Vision is the person's view and belief on how the world works and, according to Thomas Sowell, the difference is so great that it is an irreconcilable Conflict of Visions.

Sowell's book is not easy reading.   Essentially he describes that visions fall along two opposing views - the constrained versus the unconstrained.

The Constrained Vision see human nature and the world as unchangeable.  Man's nature is limited and self-absorbed.  The Constrained Vision places greater reliance upon traditions and customs as guides to better living under the belief that there is "nothing new under the sun" and that mankind has developed these customs after generation upon generation of trial and error.  The past and history is a catalogue of trial and error and the lessons of the past are to be conserved as wisdom.

The Constrained Vision is a pessimistic view of human nature - not in the sense that mankind cannot achieve greatness - but that greatness can only be achieved when the limitations of human nature are respected and men and women are free to pursue their own self-interests.  The United States Constitution is an excellent example of the Constrained Vision.   James Madison wrote, "If men were Angels no government would be necessary.  If angels were to govern men, neither external or internal controls on government would be necessary.  Federalist No. 51

The Unconstrained Vision views human nature and the world as evolving, improving, and that - as with technology - each generation builds up upon the work of the previous generations.  If man's nature is limited and self-absorbed - then you need only to change society in order to change the man.  Robert Kennedy summed up the unconstrained vision neatly when he said, "Some men see things as they are and say why.  I dream things that never were and say why not."  The past and history is not a source of wisdom to be heeded, but instead prejudices and arbitrary social constraints that future generations may (and should) rise above.

Those that believe that government can be used to improve human nature simply have an irreconcilable conflict of vision with those who believe that government cannot improve human nature.  From that schism - many unresolvable ideological debates and differences arise.

Four Basic Policy Areas

It's not just one ruler!

Politics is complicated because there isn’t just one policy area where people fall along the Liberal - Conservative spectrum.  There are four basic areas:  Fiscal Policy; Social Policy; Economic Policy; and Foreign Policy.  People can be at a different point along the political spectrum in each of these areas, so it can seem confusing.  Conservatives can be Liberal in some areas and vice versa.

Fiscal Policy Spectrum ranges depend on government spending and taxation.  Liberals tend to support increased taxation and spending.  Liberals tend also to support greater deficit spending, particularly in the face of economic downturns and other crisis as means to meet government obligations and demands.  Conservatives tend to support decreased taxation and spending, and seek to reduce deficit spending.  (Note:  The author is keenly aware that many self-described Conservatives vote for continued deficit spending.)

Social Policy Spectrum ranges on the role of government to encourage, create, or acheive social conditions.  Consistent with my definition of Liberal and Conservative - Liberals will (should) support more government involvement in shaping society, while Conservatives will (should) support less government involvement.  (Note:  As will be discussed later, these labels may seem swapped when applied to self-described Conservative opinions.)

Economic Policy Spectrum depend upon the level of government involvement in economics.  On the extreme left end of the spectrum would be communism where there is government ownership and control over all economic life.  On the right side would be completely unregulated lasses-faire capitalism.

Foreign Policy Spectrum ranges along on how engaged government should be in foreign affairs and military spending.  As with Social Policy the labels don’t fit neatly.  Conservatives tend to support increased spending on the military and and active foreign policy.  Liberals tend to support a limited military and less interventionist foreign policy.  (Note:  As will be discussed later, these labels may seem swapped when applied to self-described Conservative and Liberal opinions.)

Two important concepts should be understood: 

(1) Conservative - Liberal Ideology falls along four different broad areas.  

(2) It is quite possible - in fact common - that you can fall along the Conservative spectrum in one area and trend more Liberal in another.

QUESTION:  Do you agree with the four broad areas - or is there another area that we should consider?  For example - where would environmental issues fall?

Introduction to the Political Spectrum

Imagine a ruler in front of you.  

On the far right of the ruler - instead of the number one - you see "No Government Involvement at all."  We'll put all the Anarchists there.   This is the absence of government - the so-called state of nature - which actually isn't very pleasant but fortunately not very likely. Once you get two people together - they are either killing each other - or one dominates the other - and bingo - you've got government.  

On the far left it reads "Total Government Involvement."  We can put the Commune, or Communists there.  Here government not only controls all aspects of human activity, but owns all the property as well.  This complete control of government wouldn't be very pleasant either, but fortunately doesn't seem very likely either.

Most people - if given the choice between the two extremes would select none-of-the-above if that remained an option.  Fortunately we have more choices along the continuum between no government and omni-present government.  It is a perpetual balancing act and often the real marginal fight between Conservatives and Liberals.  The trick is, according to commentator Bill Whittle, to find the sweet spot with just enough government with the right amount of freedom.

Liberals tend to be slightly closer to the "more" government side of the ruler, while Conservatives tend to be closer to the "less" side of government.  This is an oversimplification, but for now, it is where we will start.