Your Tax Dollars at Work

One of my favorite quotations from Thomas Jefferson, and one that I often quote, is a sentence from his first Inaugural Address in 1801. In it, he gives to Congress and the American people his definition of a good government.

“….“a wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government,….”

This quotation came to mind a couple of days ago when I read an article by Grover Norquist, president of Americans for Tax Reform. According to Mr. Norquist, America celebrated “Cost of Government Day” on July 16 this year. Cost of Government Day is different from “Tax Freedom Day” which came this year on April 23.

Tax Freedom Day is the day the average American has earned enough income to pay his share of taxes for that year. Cost of Government Day is the day the average American has earned enough income to pay the actual cost of government for that year. The reasons for the difference between the two dates are twofold.

Tax Freedom Day is simply a measure of all taxes collected at the federal, state and local level compared to the total national income. It does not attempt to measure the actual cost to taxpayers of running the government. For instance, it does not include government I.O.U.s and it does not include the money paid by the taxpayer in higher prices for goods and services caused by government regulations.

When all factors are considered, the total cost of government consumes a shocking 54% of all the income earned from all sources in America. The total tax burden for 2008 is 30.8%. The difference of 23.2% represents the amount not paid directly by the taxpayer as taxes in the current year.

According to Norquist, 18% of the national income goes to pay the hidden costs of federal and state regulations. The taxpayer feels these costs as higher prices paid for goods and services. The remaining 5% is the amount borrowed by the government that will eventually have to be paid by future generations.

The cost of government as a percentage of national income breaks down as follows:

  • 22.3% cost of federal government
  • 14.2% cost of state and local government
  • 11.5% cost of federal regulations
  • 6% cost of state regulations

We should all be outraged by how far our government has strayed from the principles laid down by the Founding Fathers. By Jefferson’s standards, our experiment in self-government appears to be a miserable failure. Our government is certainly not “wise and frugal”. It does only a mediocre job at preventing us from harming one another. Instead of leaving us “free to our own pursuits of industry and improvement”, we find ourselves hemmed in on all sides by government regulations. As to, “taking from the mouth of labor the bread it has earned”; that seems to be the one thing at which government is most efficient.

How can we call ourselves a free people when over half our lifetime is spent in servitude to the government? The level of servitude promises to increase dramatically after the 2008 elections. Both Presidential candidates have promised major expansions of government into still more areas of our lives. Obama has indicated he will not only confiscate the fruits of our labor for government use, but will also ask us to give of our free time to some type of “community service” of his choosing and under his direction. In his July 2, speech at Colorado Springs, Colorado he reminded us,

“I will ask for your service and your active citizenship when I am President of the United States. This will not be a call issued in one speech or one program—this will be the central cause of my presidency. We will ask Americans to serve. We will create new opportunities for Americans to serve. And we will direct that service to our most pressing national challenges.”

If Obama is elected President, he has promised to increase the cost of government still more. McCain has also promised to increase the cost of government if he is elected, but by somewhat less than Obama. Can we afford either?

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