'Nobody Considers That a Tax'
We Americans need to expand our idea of what a tax is. Some may contend that an expenditure is only a tax when government labels it as such and there's a rate or assessment attached to it. Those people are sophists. Provided that it is not a penalty for an illegality, any government-caused expense that must be paid should be regarded as a tax.
When government policies make the prices of essentials higher than they would be in a free market, we're talking taxes. We hear journalists talk about rising oil prices as a tax hike. If such prices are due to government energy policies, like not drilling in ANWR or not building the Keystone XL pipeline, then the journalists are right, the higher prices are a tax. Whether he understands it or not, President Obama was talking about tax hikes in a videotaped interview with the San Francisco Chronicle when he said:
Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket ... Coal-powered plants, you know, natural gas, you name it, whatever the plants were, whatever the industry was, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers [video].
Correct. And those expenses that government imposes on the energy industry and which get passed to the consumer constitute taxes. But there are a host of embedded taxes built into the prices of all products and services. These hidden taxes not only pay for the "passed-along" costs of complying with government mandates, like retrofitting, but also for tariffs and corporate income taxes. (Corporations don't pay taxes; you do.)
Government policies that prop up prices, as in housing, are certainly tax hikes for the homebuyer. Government policies that make interest rates artificially low, tamping down the interest income of savers, are nothing if not taxes.
Any government-imposed monetary hurdle to making a living, such as the mandatory payment of union dues or the purchase of a professional license, is a form of taxation.
When government does not allow insurance companies to offer inexpensive barebones "catastrophic" health insurance plans and instead requires every policy to cover every conceivable medical "treatment," like contraceptives, it's a tax increase.
It makes no difference whether the government itself takes the individual's money or requires the individual to give his money to a third party, such as an insurance company (as required by ObamaCare's "individual mandate"), it's still a tax. On the ABC News program This Week, Obama famously denied that the individual mandate is a tax:
Nobody considers that a tax ... No, but -- but, George, you -- you can't just make up that language and decide that that's called a tax increase. Any ... George, the fact that you looked up Merriam's Dictionary, the definition of tax increase, indicates to me that you're stretching a little bit right now. Otherwise, you wouldn't have gone to the dictionary to check on the definition.
The expense of complying with any government mandate is a tax. Regardless of whether a mandate is on individuals, corporations or the states -- it all gets passed to individuals. No matter what they call it or how they try to justify it, if the government is costing us money and we've broken no law, we're being taxed. So we really mustn't allow our government overlords to tell us what qualifies as a tax. (Obama's performance on the This Week episode warrants repeated viewing -- watch it and read about it here.)
The late economist Milton Friedman said that "to spend is to tax." Government deficit spending is deferred taxation; the folks who are getting taxed just don't know it yet. The current administration's weak dollar policy, which forces consumers to spend more for energy and for foreign goods, is taxation; taxation by other means.
And that brings us to the most destructive tax of all: inflation. The tax "rate" for inflation can be as high as 100 percent. That's because inflation can destroy a currency. Inasmuch as taxes are paid with money, it would be interesting to see what type of new taxes would be levied if government were to destroy the currency through inflation. The Fed's recent creation of trillions of dollars of new money -- which threatens to destroy the value of money that already existed -- is a tax, although some see it as theft.
Then there are the ironic taxes, such as the expense of a psychiatrist needed to heal the emotional damage done by taxes, and the uncompensated time and expense of figuring and filing one's taxes, which is a tax upon a tax. (Just send us a bill, thank you.)
Higher prices, lower income, the high cost of doing business, deficit spending, and a mandate to buy a product are forms of taxation, as is the destruction of the value of that with which we pay regular taxes. Nevertheless, the sheeple must be fleeced.
Jon N. Hall is a programmer/analyst from Kansas City.