Re: Makers and Takers

by James C. Bennett

Just a few comments following John’s and Ramesh’s points in the Corner regarding the dependency issue: I have long agreed with Ramesh about the self-defeating nature of the “dependency” talking point. Out here in Colorado I spent five of the last six years living in a small town (population: 1,700) that was transitioning from being a blue-collar quarry workers’ town to a suburb for university-town commuters. The parents of my son’s classmates fell into both categories and I had many discussions with both types. Some substantial percentage of the blue-collar population today probably count as net cash-flow dependents because their independent income has declined so much, but none of them see it that way. They are very aware of the taxes they do pay and would much rather be back working or running a functioning small business, and being net payers. The idea that somebody who had a $50– 60,000 income before 2008 and who is now scraping by on $15,000 cumulative benefits (probably augmented by $10,000 or so in under-the-table casual income) is psychologically a dependent who votes in hopes of getting another $5–10,000 of benefits is not consistent with what I have seen or heard. They want their jobs or businesses back. Most of these people are tea partiers at least in sympathy, and can’t stand Obama. Maybe with four or eight more years of this kind of economy, more of them will have learned to think like dependents, but that is not the case today.

Secondly, if we are serious about our own economic message, why don’t we regularly count the invisible tax burden of regulation, and the opportunity cost of paying Social Security “contributions” into an imaginary “trust fund” rather than an investment fund? Do we calculate the supposed “employer’s contribution” to Social Security as part of the tax burden of employees? Because we should — to an employer that is also part of the cost to a company of hiring employees. Rather than talk about net cash contributors and beneficiaries, in this instance we should be discussing net economic beneficiaries and contributors, including the invisible costs of taxation and regulation. This is the equivalent to bringing dynamic scoring into this discussion, and it would allow us to argue more strongly that the purpose of our economic program is to restore dynamism and strong growth to the economy, thereby benefiting the great majority of the population. 

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