Taxes Are Like Insurance

Whether locally, at the state level, or even at the federal level, we’re seeing a trend that an increasing number of Americans don’t want to pay taxes.  Whether it’s retirees who resent supporting their public schools to young people who resent paying the payroll tax because they feel that they’ll never see any of it, more and more people don’t want to pay any tax UNLESS they believe they will see some immediate (and usually direct) benefit from it.  Simply put, this is a wrongheaded view of taxation.

In part, we should view taxes as insurance should be viewed.  NOTICE that I said SHOULD be viewed.  Unfortunately, we have come to view insurance in much the same way as we view taxes.  We can blame this on the modern system of paying for health care.

Modern health insurance is a misnomer.  There is very little insurance.  It’s part savings plan, part transfer, mostly a third party payment system, but very little insurance.  One thing is for sure, most people are hell bent on deriving the greatest possible benefit (which is simply human nature) and have no desire to take on most of the cost themselves.

So what is insurance supposed to be?  The idea behind insurance is fairly simple.  A large pool of entities (they could be individuals or businesses, or both, depending on what you are insuring) pool their money.  IF one or more members suffers a catastrophic loss those funds are available to pay off the claim(s).  That is what insurance is SUPPOSED to be!

What has it become?  In the health care market “insurance” has ceased to insure and instead is nothing more than a third party arrangement to pay for services.   We even see it in auto insurance: people seem to want immediate and direct benefit from the premiums they pay.  That is not insurance!

With taxes we are seeing much the same thing.  People seem to view taxes as user fees.  If they don’t derive a DIRECT benefit, somehow the tax is unjustified.  With local taxes, this is evidenced by resentment of monies spent on education while monies spent for garbage pick-up or law enforcement are OK (I can only speculate that the DIRECT benefit of law enforcement expenditure is peace of mind).

In a recent column I offered the idea of providing limited free parking downtown as one part of a solution to help revitalize downtown.  Commenters argued that this was a subsidy for downtown business (translation – no direct benefit to the commenters).

Taxes should not be viewed this way.  Unlike user fees (like tolls), not every citizen paying taxes will (nor should they) derive a direct benefit from those taxes.  The “benefit(s)” are indirect.  As an example, a revitalized downtown would boost employment and raises / broadens the tax base.

As I await the accusations of RINO or liberal to come pouring in, I want to remind you that conservatives are not anti-tax.  We are proponents of limited government.  We are proponents of efficient government.  We are proponents of ordered liberty (the big difference between a conservative and a libertarian).  We oppose the rationalistic attempts by the left to turn America into some sort of materialistic “workers’ paradise”.  We also accept that we will not necessarily derive DIRECT benefit from the taxes we pay into the system.

If this is what I really believe, why would I oppose projects such as acquiring park land in Wicomico County?  That’s simple.  Between the revenue cap and poor management from the County Executive, there is no money to develop new parks.  Why should we take property off of the tax rolls when we know that it will probably never be put to a useful purpose?

You attack the school board all the time.  Yes I do!  In fact, I will continue to do so as long as the WCBOE continues to treat the taxpayer like a piece of fruit, existing only to be squeezed.  That does not mean that I don’t support quality public schools.  That doesn’t mean that most conservatives don’t support quality public schools.  It simply means that we believe that our tax dollars should be spent wisely.

The list goes on and on.

Those that claim the mantle of conservatism, but argue that the government shouldn’t spend money on projects that don’t directly  benefit them are not conservatives.  These people are either ideologues or simply cheap.  We should be willing to pay taxes for money that is efficiently spent and provides all of us a benefit – even if that benefit is indirect.

G. A. Harrison is the Managing Editor of “Salisbury News”. Delmarva Dealings appears each Wednesday and Sunday at SbyNEWS.com.