The 'Your Money Is Not Yours' Crowd

Paul Krugman, columnist for the New York Times, recently criticized those who "see taxes and regulation as tyrannical impositions on their liberty" and who believe "that people have a right to keep what they earn."

One branch of American politics shares Krugman's view that the money you earn -- the material manifestation of your mental and physical labor -- is not yours.  It belongs to the government.

This view was recently on display when some referred to the extension of the Bush tax rates as "tax cuts."  With tax cuts, taxpayers pay lower rates.  With an extension of tax rates, taxpayers keep paying the same rate.  Extending the Bush tax rates prevented tax rates from going up.  Nobody got a tax cut.

But to the "your money is not yours" crowd, the government gives you a tax cut when it refrains from raising your taxes.  It's a gift.  You should be grateful that it does not take even more of what you have earned.  It belongs to the government, after all.

Because your money is not yours, the government feels free to take it from you and redistribute it to others.  President Obama expressed this belief when he said, "I think that when you spread the wealth around, it's good for everybody."

However, those in government did not always support redistribution of wealth.  The Founding Fathers were against it.

Thomas Jefferson observed:

To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to every one a free exercise of his industry and the fruits acquired by it.

And James Madison:

That is not a just government, nor is property secure under it, where the property which a man has in his personal safety and personal liberty, is violated by arbitrary seizures of one class of citizens for the service of the rest.

And Samuel Adams:

The Utopian schemes of leveling, and a community of goods, are as visionary and impractical, as those which vest all property in the Crown, are arbitrary, despotic, and in our government unconstitutional.

The Founders would have supported the popular bumper sticker that says, "Spread my work ethic, not my wealth."  They believed that "[t]he proper role of government is to protect equal rights, not provide equal things," according to The 5000 Year Leap, a publication of the National Center for Constitutional Studies.

Despite the intent of the Founders, those in government have been perpetuating the Ponzi scheme of transferring wealth from the productive class to everyone else.  That the scheme is unsustainable is evidenced by the collapse of the modern European welfare state.

Modern politicians have learned that an easy road to power is to buy votes from those who feast off free goodies at the expense of others.  Roughly 50 percent of Americans pay no income taxes at all.  It should not come as a surprise, therefore, that many of them vote for politicians who favor higher income taxes and entitlements.  What could be more popular than getting something for nothing?

But a system of extorting money from one group for the benefit of another group cannot last for long without collapsing under the weight of its own guarantees.  As Benjamin Franklin said, "When the people find that they can vote themselves money, that will herald the end of the republic."

Ostensibly, the agenda of Santa Claus politicians is to help the downtrodden with utopian solutions.  These sincere do-gooders profess to be driven by humanitarian motives.  But their real agenda is to increase their power.  It's all about them, not others.

These supposed compassionate benefactors have established a culture of dependency among their constituents which empowers the politicians but weakens society.

These politicians know that one of the keys to increasing power is to give the people somebody to hate.  So they pit those who are being led and fed by the state against the rich.

Class warfare is not hard to wage since most people are already jealous and resentful of the rich.  Some politicians tap into these feelings by publicly promising to punish the rich for being greedy.  According to these politicians, society consists of victims and villains.  The victims are the helpless masses who are trapped at the bottom, and the villains are the immoral rich who exploit them.

But who are really the greedy villains?  Are they those who create wealth and improve society through hard work and innovation? Or are they those who do not work or honor financial obligations and feel entitled to other people's money?

The Constitution of the United States guarantees us an equal opportunity, not an equal outcome.  It is not everyone's right to be rich.  It is not immoral that some are better-compensated than others.  In America, everyone has the same opportunity to provide value to society and to be rewarded through market forces commensurately.

Some view wealth as static.  There is only so much to go around.  If you take a piece of the pie, there is less left for others.  But capitalism allows individuals to make the pie bigger so that everyone benefits.  When individuals profit by creating new ideas that generate new jobs, they make the pie bigger.  Their profits do not correspond with others' losses.

Representative John Campbell, Republican member of the U.S. House of Representative from California, recently wrote:

Since I came to Congress, I have been the author of the "Put Your Money Where Your Mouth Is Act."  This simple bill would add a line near the bottom of Page 2 of all Form 1040 tax returns, allowing any taxpayer to voluntarily and very easily pay more tax than the law requires.

Putting this line on tax returns would provide Paul Krugman with the opportunity to put his money where his mouth is by voluntarily paying extra taxes.  He should not have a problem doing this because it's not his money anyway.

Bill Costello, M.Ed., is the president of U.S.-based Making Minds Matter, LLC and the author of Awaken Your Birdbrain: Using Creativity to Get What You Want.