Ghost of a flea

Maybe it would help clarify my position if I use an analogy. Assume that a gang of organized criminals has control of a neighborhood. Its citizens and shopkeepers are visited every month and each must hand over, at gunpoint, an equal share of the total needs of the gang which, after all, has prostitutes to pay, drugs to buy, etc.

Then, at some point, one of the shopkeepers manages to convince the gang to skip his store on the monthly visits. The gang, dismissing out of hand the possibility of cutting back on the drugs and prostitutes, therefore has to hit everyone else up for a bit more each month.

Question: Would the citizens paying the increased monthly amount have a legitimate basis to complain that they are subsidizing the shopkeeper? Of course not. The shopkeeper got nothing for his money in the first place. He was being robbed and now he's not being robbed. Sure, you wish it was you that was being skipped every month, but there's no way to justify blaming the guy who was able to avoid paying.

The analogy is obviously imperfect, but it comes close to how I view the situation with taxpayers and governments today. Your example talks about things that "the community has decided to pay for." Our fundamental disagreement, it seems, is over whether the "community" can legitimately "decide" to pay, and collect taxes for, anything it wants. I don't think it can. Maybe 10% of federal tax revenues go to proper government functions; i.e., police, courts, and military. I happen to think these few functions can be funded voluntarily and require no taxation. But even if you're far less of a radical than me, and think these functions, plus roads, fire departments, and utilities need to be state-run and tax-funded, we're still so very far from the proper balance of things that any ire directed towards someone who manages to escape some aspect of the taxman's grasp seems to me to be misplaced.

So... let's see if I am following the bouncing ball. Canada's elected representatives are analogous to a criminal gang? And (some) religious organizations who have made a deal with this gang are not colluding but are in some sense libertarian role-models for having escaped their illegitimate dues? They make peculiar libertarians considering their attempt to use of the system you describe as extortionate to impose their ideological agenda.

No wait, scratch that last bit. Their agenda hit a speedbump in Parliament tonight. Good.

You are right to guess I am less radical than you. I have this odd idea that when I am driving on the highway that somebody had to fix the pot-holes for me to do so. That would be the case whether the pot-holes were fixed by a government employee, to an employee of a sub-contractor to the government or to an employeee of the private owner of the highway to whom I was paying rent. And those pot-holes would have to be fixed even if some folks got to ride on the highway for free while the rest had to pay. Heinlein's moon-buggies provide a nice fictional alternative to pot-hole repair but given my life at the bottom of a gravity well I am stuck with highways and pot-holes just now. If some people got to avoid paying to use the highway because of their particular religious beliefs it would cost everybody else who used the highway a higher rent (regardless of whether that rent was imposed by a public or private body) or fewer pot-holes would be filled. Those free-loading drivers would only be libertarian heroes in the same sense that some folks think shop-lifting makes them anarchists. I like the inventiveness of your analogy but it remains an argument against a particular form of political organization, not an argument against balancing ledgers. Or the fact that some people have to be paid to build and maintain all those services it must pain your libertarian heart to make use of... I poke fun in a gentle way! I am open to the idea that we should have fewer highways, less pot-hole maintenance and should object to an excessive expense imposed by the system of bilingual, educational anti-smoking billboards deemed essential by our elective representatives - or bishops, mullahs, academics, etc. - to our driving experience. But none of this contradicts my point. No matter what our system of government or the legitimacy or rationality of our/their administrative choices some expenses - even those minimal expenses of a libertarian utopia - would be supported. An exemption to the maintenance of those expenses is no different than a subsidy because it is the same money no matter which side of the ledger is it drawn from. This observation is entirely independent of our opinions about any particular exemption or subsidy. I am not arguing for or against my particular objection to exemptions or subsidies for (some) religious organizations, or indeed drivers or shopkeepers, in this instance. I am making an argument about math.

I * am * curious how you envisage a private system of fire-fighting. I seem to recall Crassus made excellent money in property speculation with his private fire brigade.

Can we agree on any of the following points?

1. When someone is forced to pay toward services for others which he himself gains absolutely no benefit from, no subsidization would be involved in arranging to be exempt from that payment .

2. When someone is being given a service he neither wants nor needs, if he arranges to be exempt from paying for that service, this arrangement cannot be described as subsidization. This is true even if the government continues to force the unwanted service upon him using increased taxation from others.

3. To the extent that a person's legal avoidance of taxes meets one of the above two criteria, he is not being subsidized.

4. To the extent that a person legally avoids taxes that pay for services he needs and/or wants, he is being subsidized by those who do pay.

This doesn't address every case but I think our starting points are too different to get agreement on anything more involved than these.

I'll have to leave the question of whether Crassus' example demonstrates the impracticality of commercial fire departments for later (mainly because I don't remember the details).

I think we agree on a number of fundamentals. The difference is you want to argue a broader political case while I am making a point about accounting that holds true regardless of the political system at issue. I may or may not agree your political case and I believe we are in broad agreement about some folks receiving exemptions whether or not I am right to say these are equivalent to subsidies (I am right, by the way) or should they fit the needs of your broader argument against governance per se.

As for Crassus, his commercial fire department was very practical for him. And, arguably, for those who would have have realized a smaller return on their entirely burnt out properties than the lower and lower (so sorry for this) fire-sale price they were prepared to accept from him as their properties burned to the ground, legend has it, one floor at a time.

Ignoring "political" considerations...

The point I think the Flea is trying to make is that an exemption, a subsidy, or a tax are mathematically the same: it's just the numerical value of such that is different. To a nit-picker, Flea, you are wrong as each word has a different meaning - but I whole-hearted agree with the point I think you are trying to make.

Example:

- My income is $8. There's a 25% tax on income. The government takes $2 from me.

- Now I'm a church. My revenue is $8. The government overlooks (exempts) my revenue (collections, tithes, donations, bake sales etc.) because of history and the argument that churches, on the most part, do good charitable work. I pay $0, I receive $0.

- Now I'm a tortured-Marxist/Anarchist performance artist who has somehow qualified for some kind of grant. I have no income, but the government gives me $2 to stand outside the local stock exchange covered in human waste screaming profanities...

Each example may effect a different account in the government ledger, but substantively it's about making a decision to take money from one group (taxpayers), ignore another group (churches), give money to another group (performance artists, etc.)

It is substantively the same process no matter what you call it.

In each case a decision has been made about the same issue: whether to take/give money from/to a subset of a group.

Ray: That is exactly my point. What seems peculiar to me is that socialists tend to favour subsidies while (some) conservatives tend to favour tax-cuts, both castigate the other and both cost the public purse the same money.

If I understand Mark's point correctly, since all taxation is theft it is misguided of me to complain about some group being exempted from that theft no matter on what basis their exemption is granted. Which would be fine except: i, all taxation is not theft; ii, if it were theft those people with exemptions are people actively colluding in the practice, and; iii, by the same logic a subsidy would still be no better than an exemption as the real problem remains the initial theft, not the fact stolen money was spent on this or that organization or agenda. And after all of that my point about the specific issue of equity would stand no matter how unfair the system is at its fundament. But such is recurring problem with philosophical libertarianism.

It would be interesting to look into the history of taxation of churches and the issues around it.

I'm not too opposed to the idea, in theory. If the argument holds that churches are primarily there to do good work and distribute charity, then their income tax payable should be minimal - they collect revenue and re-distribute it to the needy, minus cost of distribution. If they're not hoarding huge profits, then theoretically they should pay no INCOME tax at all...

With the school system in Ontario I'm no expert, but if Catholic taxpayers want to fund Catholic schools, then I see no problem with that so long as the taxes collected from Catholic taxpayers equal the costs incurred to run them and that the general populations isn't kicking in to maintain the seperate system all the time.

The fly in the ointment is potentially property taxes. Churches sit on very prime real estate. I have no idea how "exempt" they are from property taxes - if they're exempt now and have to start paying market assessment...OUCH!

I assume the tax exemption is a hold-over from the Middle Ages when Church and Crown had separate legal systems and a parallel line of authority was in place. This has nothing to do with a secular republic or, indeed, a nominal constitutional monarchy lacking a properly established Church. But such is the enjoyment of tradition. What bothers me is not so much that we have some peculiarities in our tax code or that this is an unreasonable way to continue to distribute charity but that the tax breaks of (some) religious organizations should be used as a (purely hypothetical) bar to ending a real, ongoing, systemic injustice. The truly monstrous part of it is watching some blessed hypocrite claim his right to discrimate is being discriminated against! It is McVety and his ilk, not the subject of same-sex marriage let alone some made up "gay activists", who lead me to question where my money is going, whose views I am paying to support and just what I need to do to stop doing so. But that is the crux of the problem. To McVety it is only sweet reason that gay people be treated with contempt and that everyone else should pay him and his like to do the contempting.

As for property taxes: I have been wondering what St. James would sell for as a condo development. Also, how many more people would then have use of the property than currently do in the thriving business that is the Anglican Communion. In England, at least, churches are a fantastic tourist draw so they continue to contribute to the public purse in much the same way as when the tourists were calling themselves pilgrims. But then I would make the same argument in favour of Pride Week in Toronto. It is not as if Canadians have anything else that comes close to a proper Mardi Gras.

The point I think the Flea is trying to make is that an exemption, a subsidy, or a tax are mathematically the same: it's just the numerical value of such that is different. To a nit-picker, Flea, you are wrong as each word has a different meaning - but I whole-hearted agree with the point I think you are trying to make.

That is exactly my point.

I'm being accused of being the nitpicker, but if this is really the point, I think it’s Nick who's making the technically correct yet barren argument.

What kind of conclusions can we draw from the obvious fact that in a given system where the outlay is fixed, a shortfall in income from one source must be made up for by an increase in income from other sources? The only legitimate kind would be mathematical conclusions.

But surely Nick was making a moral/political judgment, at least implicitly, when he complained (angrily, I thought) that he was literally supporting churches in their efforts to spread nonsense. I don't know about you, but me, math alone doesn't work me up that much.

So when I complain about my tax dollars supporting the CBC's spread of alternately boring and infuriating garbage, I mean by that complaint that I regard the situation as wrong. Wrong for the government to give money to the CBC and wrong for the CBC to take it. To know whether this judgment is warranted, and if so where to direct the anger, I have to have considered the larger political system in operation: the roles of the participants, the rights of each, etc. If I haven’t evaluated the system, I can’t make many meaningful judgments about its workings and results.

Having done that evaluation, I would never say flatly that my tax dollars literally support church dissemination of falsehoods. I would say churches are more able to spread their stupidity due to having fewer assaults perpetrated on their property rights than the rest of us. I may also point out, blandly, as an aside, that given our current political situation and the rules of arithmetic, this means the tax burden on the rest of us may be higher.

Bottom line, given my political principles, a subsidy is a benefit handed out to someone who did not earn, and who has no right to, that benefit. A tax cut, on the other hand, is the act of allowing more money to remain with its rightful owner. Equating these dramatically different concepts is misleading and wrong (and if one disagrees, the political principles behind that opposing view need to be brought into the discussion; you can’t do it by taking the system as a given). If a technical point about balance sheets needs to be made, surely there’s a way to do it that doesn’t gloss over these important distinctions.

Hi Mark,

I thought Ray was suggesting that my argument was subject to nit-picking, not that you were making a nit-picking argument. I believe we are both taking your argument seriously. It is just that in my case I believe your argument is wrong on two points.

First, you are mistaken to suggest that organizations are keeping money that is "rightfully theirs" through tax exemptions but are claiming a benefit that is not when they accept subsidies. If tax exemptions are a case of people keeping what is rightfully theirs one might as well say that a subsidy is returning money that rightfully belongs to them. In both cases, however, the same money ends up with the same particular organization at the expense of everybody else within a given system. Once again, this is true whether or not that system is legitimate or which side of the ledger is doing the work. That would be the math part.

Second, you persist in ascribing views to me that I have not stated. It is frankly irritating for you to suggest that anything I have argued suggests current levels of taxation of government spending are or are not reasonable in toto and then to say that by implication my first post is the underlying purpose of my second. My second post (this one) was in fact meant to address exemptions and subsidies entirely distinct from my earlier post about specific exemptions and subsidies in the case of (some) religious organizations. I cannot have stated this more clearly. In fact, I concluded this post by saying explicitly that my argument is valid whether or not the organizations in question are expressing a religious ideology. But you want to make a political argument against taxation per se, a subject I find boring and hence have at no point addressed excepting an aside to the effect that some limited taxation seems inevitable in even the most libertarian context. That is your argument to make, you may in fact be right, but your confusion about my position seems to be largely due to your insistence that it is an argument I am entering into. I have not.

You are, of course, correct that I was making a moral judgement by questioning the selective benefit assigned to (some) religious organizations through subsidies and tax exemptions. In case it was not perfectly transparent from my argument, I was and do condemn those folks who are literally being paid to promulgate views at the expense of their fellow citizens politically, spiritually and financially. But this is an entirely distinct argument from my assertion that tax exemptions and subsidies are effectively the same thing. You seem to ascribe a moral value to both: the first positive and the second negative. That is fine but it does not change the math. I am sorry to inform you that selective tax exemptions are no less damaging to an Objectivist utopia than selective subsidies no matter the merits of any particular regime of exemption or subsidy or any particular choices about which factional interests profit at the expense of the rest. The math would remain the same even if every word out of McVety's mouth was true and it was God's will that the Canadian tax system endorse them.

And leaving Crassus aside: I * am * still curious how your system of private fire departments would be more effective than the state system we currently make use of.

Mark: I was referring to Flea using different specific labels and saying they are all the same. A nitpicker (not you) would dismiss his mathematically correct argument by saying that they're not the same and that the Flea is engaging in crazy-talk and therefore his whole argument is bull without actually engaging in debate.

You seem to be arguing policy and proposing that tax cuts are somehow more (noble? moral?) than subsidies due to the merit of the individual involved and why he was being taxed/subsidized/exempted. Many would think you correct in that assessment, but I don't think that's what this post was about.

Nick,

I have to say that I'm perplexed as to where we are failing to communicate here. I've re-read the posts and comments and would change little in my arguments. I will try to make a few more points, but I'm not sure it will do much good. There appear to be some unstated assumptions one or both of us are making that are critical to bridging the gap.

If tax exemptions are a case of people keeping what is rightfully theirs one might as well say that a subsidy is returning money that rightfully belongs to them.

I'll give you this much: if one thinks that an individual has a right to what he earns, while a tax-cut is always justified, to know whether a subsidy is justified you'd have to calculate the net tax/subsidy impact on him. (But I'd further argue that subsidies are bad regardless because it means, 99% of the time, the government is spending money on some some non-legitimate function that people would never voluntarily support. That is, in a free market, the rightful owners of that money would not have spent it on that function.)

It is frankly irritating for you to suggest that anything I have argued suggests current levels of taxation of government spending are or are not reasonable

My only suggestion, which I tried to make very clear in my last comment, is that a non-mathematical statement about tax-cuts and subsidies is impossible without considering questions of this kind. I am trying to understand how you get from a tax cut (or exemption) to condemnation of "those folks who are literally being paid to promulgate views at the expense of their fellow citizens politically" without looking at the details of a political system. I am saying that when one makes such an evaluation (as opposed to calculation) one logically must have, at least implicitly, done that analysis and made more fundamental judgments. If you want to argue that no such implicit fundamental evaluations of a system are necessary, that would be an argument I'm interested in, but I don't think you've made it yet.

...and then to say that by implication my first post is the underlying purpose of my second.

Sorry, I really don't understand what you mean by this. I do understand that you think subsidies and tax-cuts are equivalent regardless of who gets them. I'm sorry if by sloppy wording (or sloppy logic) I implied otherwise. If you still think I'm missing your point here, let me know.

But you want to make a political argument against taxation per se

No, at least not primarily. Primarily, I want to make the point that any non-mathematical evaluation of subsidies and tax-cuts requires some political/philosophical view of taxation and the system in which it occurs.

You seem to ascribe a moral value to both [tax cuts and subsidies]: the first positive and the second negative. That is fine but it does not change the math.

Correct and correct.

I am sorry to inform you that selective tax exemptions are no less damaging to an Objectivist utopia than selective subsidies...

Well, you can't talk about taxes in an Objectivist society because taxes would not exist in such a society. But, if we assume it's a mixed economy like we have today, my question is: By "damaging" do you mean to make any moral judgment? Because if you do, I disagree. And I disagree because I would never describe the failure to steal money from someone as bad, while I would always describe the distribution of stolen money as bad (unless it's to return it to its rightful owner, as mentioned in my first point above).

If by "damaging" you simply mean that the system, by its own rules, must make up the difference somehow, then I agree, but do not see any moral conclusion to be drawn from that.

***

It just occurs to me that maybe the root of our disagreement is that you think (and assume that I would also think) it's inherently wrong, whatever political/economic system exists, for some members of society to contribute less than others, or less than their fair share (however one determines that). (Please don't take this as putting words in your mouth! I'm just looking for a possible explanation.) If this is the case, at this stage of the argument, I think it's best just to say that I disagree, and that in fact I disagree with the whole premise of a responsibility to "contribute to" a social/economic system. Now, if this has nothing to do with our disagreement, please ignore this paragraph.

Sorry, Nick, if any of this has made you even more irritated. I assure I have been trying to understand your points and make mine as clear as possible. My failure on either count is, I promise, due to incompetence rather than malice.

I * am * still curious how your system of private fire departments would be more effective than the state system we currently make use of.

I'm probably even less interested in arguing the details of private fire departments (or roads, or what have you) than you are in arguing about the legitimacy of taxation. But I will say that I see nothing inherent in the nature of fire fighting that makes privately-run organizations any less able to handle the task than ones run by the government. In other words, I see the question as fundamentally of the same sort as "how would a private system of food distribution/medical care/cable TV provision/home building be more effective than a state-run system". In other words, I think the validity of the principles behind, and the practical success of, private systems over government systems in general puts the onus on he who argues for government solutions to explain the unique nature of the situation and why a government solution would be superior.

An even more basic point I'd make is that just as we have no right to food or clothing, there is no inherent right to be free from accidental fires. (While we do have a right to be free from arson, that's a law enforcement matter.) Therefore (as with food and clothing) it's up to each one of us to make our own provision for protecting ourselves.

I promise if you want to pick apart any of this, you will have the last word. :-)

I confess I am not all that interested in alternative arrangements for my fire department either. I only ask as it was one of your suggestions for how your position was more "radical" than mine and I thought you might have some idea how this "radical" plan might be effected as policy. Tax cuts for everybody! Nobody pay for anything! My house is on fire!