The Crazy-Wrong Argument on Taxes

The post immediately below first appeared on sister-site FREE WHITEWATER, my blog published from my hometown of Whitewater, Wisconsin. It’s about the tendency of local officials to insist that they can get public money for their constituents without a tax impact. You’ve surely heard the same false contention from bureaucrats in your part of America, too.

A succinct truth: money doesn’t grow on trees.

Local government funds municipal projects in one of three principal ways: through local taxes & fees, local borrowing (debt in the form of bonds), or public money from other jurisdictions (grants from the state or federal government).

These grants of state or federal public money are, themselves, from taxes or borrowing (at the federal level, this includes the reckless, inflationary option of simply printing more greenbacks).

In no case, however, in not a single one, do these grants come to a community without a tax impact.

And yet, and yet, official after official will contend that one can take state or federal money without a local consequence, with ‘zero tax impact’ (in the words of a poorly-reasoned newspaper editorial about purchasing expensive farmland as parkland). Residents of a Wisconsin county are simultaneously residents of the state and of America, after all.

(Those who talk about grabbing state and federal grants mean that they’ll take all of the supposed benefits but apportion the costs not merely to their own constituents but to a larger number elsewhere, who will receive no benefit at all.)

Even libertarians, as I am, accept that there will be some public spending, and that there should be some. The key questions are (1) on what objects will we spend? and (2) at what cost, immediately and in alternatives left unfunded?

Exhorting a county’s residents, for example, to “grab” state money now, for whatever silly project, is an exhortation to unthinking selfishness.

It’s all just stuffing more in, and more still, while others go without anything, as though there were no consequence to taking in whatever one can, or whatever comes by on a plate:

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