Libertarians and Taxes

Thu, 14 May 2009 12:09:43 +0000

From David Boaz of the Cato Institute, who visited Dartmouth yesterday:

“Too many advocates of small government still have this lingering attachment to the Republican party,” Boaz said. “It’s like being a battered wife — how long do you wait to leave?”

Perhaps the more interesting part of the analogy is, Where do you go when you leave? Typically, it is not to another partner, but to a period in which you are not in a relationship until you can recover from what just happened and make the changes that are needed so it never happens again.

Are the Libertarians doing that? I'm not so sure. Consider more of what Boaz said:

Boaz described the recent Republican tea parties in protest of tax day as “the revival of a freedom movement.” He also referenced a recent advertisement run by the Cato Institute in several major U.S. newspapers, including The New York Times. The advertisement discussed perceived flaws in the economic stimulus package.

“Someday, this ad is going to be remembered as the revival of the free market movement,” Boaz said.

At moments like this, we go back to Milton Friedman's adage, "To spend is to tax." I cannot really come up with a better word than juvenile for the tea parties -- don't protest the taxes unless you can identify the specific cuts in expenditures that you would make to bring the budget into balance. If you think taxes are bad, then you should think deficits are worse, because they raise the taxes of people who were not represented in the decisions to spend the money.

That's the real lesson from the Revolutionary War period that should be drawn. And the danger for the Libertarians is that if they don't put the reduction in expenditures ahead of the reduction in taxes on their agenda, they are destined for another abusive relationship down the road. This title of an Economix post had it right, "Where Were the Medicare Tea Parties?"