Tuesday, March 28, 2006

Thought-provoking hyperbole

Rush Limbaugh was making a point yesterday about the proposed immigration reform in Congress: that the reform is just a load of "jabberwocky" that is "designed to placate you and pander to you to make you think that they reeeeeally mean it this time."

He said that the rationale for the "reform" is that there are too many illegal immigrants already in this country to round up and deport, so now we're going to crack down and turn off the illegal immigrant spigot.

Limbaugh wondered what kind of legislation would be passed in Congress if 40 to 50 million of us simply stopped paying taxes. Since nothing is going to be done about the millions of illegals already in this country, it would seem that passive resistance is a proven tactic to induce "reform". God knows that the income tax system needs to be simplified. How quickly do you think Congress would act to reform the system if, say, 15% of the population simply didn't pay taxes?

A good old-fashioned tax protest should do the trick...but only if a number of taxpayers greater than the number of IRS agents or the number of available jail cells were to stop paying taxes. Limbaugh posited that it would fall on the self-employed to stage this sort of protest since we aren't subject to withholding. If it's good enough for illegal immigrants, it's good enough for us taxpayers, don't you think?

I got an excellent response from 2privatus@comcast.net:
Granted, Limbaugh's "tax strike" idea wasn't intended to be taken seriously. But his notion -- reminiscent of Ayn Rand's Atlas Shrugged -- does serve as an interesting thought experiment.

Of course, this experiment ultimately fails. But why it fails -- and how it could succeed if the right political leadership were present -- are of some interest (at least to me, and, perhaps, to others).

If taken on its merits, Limbaugh's notion of a tax strike is not merely some anarcho-capitalist wet dream or tax protester fantasy about an apocalyptic coup that will liberate everyone from having to pay taxes forever. Instead, it has the virtue of being a somewhat coherent strategy: It seeks to use a practical instrumentality to achieve a limited aim -- pressuring to the Federal Government, were it hurts them most (their tax collections), in order to obtain substantive tax reform (Like, say, a National Sales Tax accompanied by a repeal of the 16th Amendment).

Despite this virtue, you still have to respond to Rush's speculation in the same way that Steve Martin's comic persona does to some breathtaking proposal for achieving rapid historical progress: Naaaaaaaaaaaaaaaa!

The problem with the tax strike idea is that no taxstriker interested in participating could ever be sure that a sufficiently large number of his fellow taxpayers would join with him in refusing payment to the government. Distrust acts to deter most taxpayers from becoming taxstrikers. Consequently, the kind of mass movement that would be both large enough to fiscally wound the Feds and too large to be effectively coerced by them would never coalesce. Those brave -- or foolish -- enough to participate in a tax strike would be too few in number, and would inevitably suffer loss of both property and liberty as the IRS retaliates against them. In Game Theory, ideas involving the defeat of potentially advantageous collective acts of defiance by such distrust are labeled The Prisoner's Dilemma:

But there could be a way out of this dilemma.

If the taxstrikers could be sure that they would escape punishment, then the game changes, and the calculus of defiance turns out in favor of the taxstrikers. Even if -- as is quite likely -- most taxpayers would initially fail to join a tax strike, and those few who refused to pay could be easily targeted for punishment, if they were were not punished, then the costs of defiance would be reduced, and the tax strike could then grow.

How could such a thing happen? It would all depend upon the character of the head of state: The President.

A President who was serious about seeking tax reform -- and despairing of the prospects of achieving in the face of partisan gridlock in Congress -- could make use of a tax strike seeking the limited goal of bringing pressure upon the Federal Government to enact meaningful tax reform. All he would have to do is use his constitutional power to grant pardons to excuse such taxstrikers from punishment, and allow the tax strike to grow. Once it became clear that taxstrikers would not be punished, it would reach a level at which Congress would be compelled to enact tax reforms in order to restore the Federal Government's capacity to raise revenues.

Can such a thing happen now? In other words, is the current President, George W. Bush, the kind of man who could support such a tax strike on behalf of substantive tax reform? Could he be trusted to use his pardon powers in support of taxstrikers in pursuit of such reforms?

Naaaaaaaaaaaaa! Naaaaaaaaaaaaa! Naaaaaaaaaaaaa!

While President Bush did back a series of modest temporary tax cuts early in his administration, he has shown little genuine enthusiasm for more substantive tax reforms. He lacks both the time and the will, preoccupied as he is by the War on Terror and the one in Iraq (both now grouped together under the current moniker "The Long War"), and given to supporting a series of domestic enactment (such as his No Child Left Behind Educational Reforms and the Medicare prescription drug benefit) that seem aimed more at placating Democrats than advancing a limited government fiscal agenda. Given his manifest inability to even veto legislation, Bush also seems to lack the guts required to use his pardon power to offer protection for a tax strike movement on behalf of real tax reform.

Who is George Bush? One things for sure, he certainly isn't John Galt.

But what if there were ever elected a President who was really interested in real tax reform? What if he were also willing to undertake the political risks of tolerating a tax strike as a tool for achieving that goal?

Yeeeeeeeeeah!

2 comments:

2privatus@comcast.net said...

Granted, Limbaugh's "tax strike" idea wasn't intended to be taken seriously. But his notion -- reminiscent of Ayn Rand's Atlas Shrugged -- does serve as an interesting thought experiment.

Of course, this experiment ultimately fails. But why it fails -- and how it could succeed if the right political leadership were present -- are of some interest (at least to me, and, perhaps, to others).

If taken on its merits, Limbaugh's notion of a tax strike is not merely some anarcho-capitalist wet dream or tax protester fantasy about an apocalyptic coup that will liberate everyone from having to pay taxes forever. Instead, it has the virtue of being a somewhat coherent strategy: It seeks to use a practical instrumentality to achieve a limited aim -- pressuring to the Federal Government, were it hurts them most (their tax collections), in order to obtain substantive tax reform (Like, say, a National Sales Tax accompanied by a repeal of the 16th Amendment).

Despite this virtue, you still have to respond to Rush's speculation in the same way that Steve Martin's comic persona does to some breathtaking proposal for achieving rapid historical progress: Naaaaaaaaaaaaaaaa!

The problem with the tax strike idea is that no taxstriker interested in participating could ever be sure that a sufficiently large number of his fellow taxpayers would join with him in refusing payment to the government. Distrust acts to deter most taxpayers from becoming taxstrikers. Consequently, the kind of mass movement that would be both large enough to fiscally wound the Feds and too large to be effectively coerced by them would never coalesce. Those brave -- or foolish -- enough to participate in a tax strike would be too few in number, and would inevitably suffer loss of both property and liberty as the IRS retaliates against them. In Game Theory, ideas involving the defeat of potentially advantageous collective acts of defiance by such distrust are labeled The Prisoner's Dilemma:

But there could be a way out of this dilemma.

If the taxstrikers could be sure that they would escape punishment, then the game changes, and the calculus of defiance turns out in favor of the taxstrikers. Even if -- as is quite likely -- most taxpayers would initially fail to join a tax strike, and those few who refused to pay could be easily targeted for punishment, if they were were not punished, then the costs of defiance would be reduced, and the tax strike could then grow.

How could such a thing happen? It would all depend upon the character of the head of state: The President.

A President who was serious about seeking tax reform -- and despairing of the prospects of achieving in the face of partisan gridlock in Congress -- could make use of a tax strike seeking the limited goal of bringing pressure upon the Federal Government to enact meaningful tax reform. All he would have to do is use his constitutional power to grant pardons to excuse such taxstrikers from punishment, and allow the tax strike to grow. Once it became clear that taxstrikers would not be punished, it would reach a level at which Congress would be compelled to enact tax reforms in order to restore the Federal Government's capacity to raise revenues.

Can such a thing happen now? In other words, is the current President, George W. Bush, the kind of man who could support such a tax strike on behalf of substantive tax reform? Could he be trusted to use his pardon powers in support of taxstrikers in pursuit of such reforms?

Naaaaaaaaaaaaa! Naaaaaaaaaaaaa! Naaaaaaaaaaaaa!

While President Bush did back a series of modest temporary tax cuts early in his administration, he has shown little genuine enthusiasm for more substantive tax reforms. He lacks both the time and the will, preoccupied as he is by the War on Terror and the one in Iraq (both now grouped together under the current moniker "The Long War"), and given to supporting a series of domestic enactment (such as his No Child Left Behind Educational Reforms and the Medicare prescription drug benefit) that seem aimed more at placating Democrats than advancing a limited government fiscal agenda. Given his manifest inability to even veto legislation, Bush also seems to lack the guts required to use his pardon power to offer protection for a tax strike movement on behalf of real tax reform.

Who is George Bush? One things for sure, he certainly isn't John Galt.

But what if there were ever elected a President who was really interested in real tax reform? What if he were also willing to undertake the political risks of tolerating a tax strike as a tool for achieving that goal?

Yeeeeeeeeeah!

Steve Erbach said...

Excellent. You remind me of an exuberant Lee Harris from TechCentralStation. Your message has very much put a spring in my step!

You present a lovely fantasy. Now that we've had our first Baby Boomer Presidents, Clinton and Bush-43, perhaps it's time to elect our first Counter-Culture President!

Sincerely,

Steve Erbach
The Town Crank