A Different Type of Tax

promoted --

Sometimes we need to see things differently to understand them fully. right now, I'm reading the book "Free Lunch" by David Cay Johnson. It details how the rich are twisting government policy to enrich themselves. No surprises here.

But this article isn't about railing against the rich, it's about looking at the structure of government differently. What we learn in school is that there are three branches of government: Congressional, Presidential and Judicial. In practice, we have a fourth branch of government which is comprised of a loose coalition of the super wealthy who use lobbying and campaign contributions to exert influence on the other three branches. Again, nothing new here.

Now we will look at something new. We are used to looking at government as the creator of rules, laws and taxes that govern commerce and our lives. However we generally overlook the other force that creates rules we must follow, laws we must obey and taxes we must pay: The super wealthy and large corporations.

Libertarians and Republicans generally support smaller government, fewer laws to obey and fewer taxes to pay. In principle, this is a worthy goal. Get government out of our lives! Yet they fail to take into account that this creates a power vacuum that is quickly filled by the rich and powerful.

Without government acting as a counterbalance to this unofficial entity, new rules are established that have the defacto power of law. For example, a lack of inspectors and enforcement at a meat packing plant sets a new unofficial law about how much excrement can be in our meat. Lack of oversight in the trading of information sets defacto laws about how much privacy we have. Lack of legal recourse or lack of sufficient punitive damages sets laws about how much corporations can get away with.

The point here is that unofficial laws are created that have as much force as real ones. Less government does not mean less laws, merely less obvious ones.

We are also taxed by the super wealthy. Subsidies, tax breaks, transfer of risk, monopolies and collusion all represent various forms of taxes that we pay to the rich. The higher prices we pay for insurance, (through unpaid claims), for credit, for oil and for a thousand other things that are either subsidized, receive tax breaks, or are more expensive due to suppression of competition should be seen collectively as taxation by the super wealthy and large corporations.

The idea that we can have small government is a myth. Laws are going to be made and taxes will be paid. It's just a question of who gets the money and the control. We cannot have the small government that Libertarians and Republicans dream of because choosing smaller government merely shifts the collection of taxes and creation of laws to our unofficial branch of government.

Only when we recognize this influence in our lives for the unofficial government force that it is can we understand what choices we need to make. Many Americans distrust our government and don't like giving away money to those who feel entitled to take it, but the alternative is another form of government where taxes are subtle and often hidden, where laws are not voted upon and there is no practical way to address the wrongdoing of the powerful.

It is not the easy choice that it appears to be.

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I remember several years ago someone telling to watch any economic sector or discipline and correlate receding power with the number of women and minorities who held positions of supposed influence. The same wag pointed out that when women and minorities started holding government and elected positions, the real power would be elsewhere.

Background and overview of administrative - "unofficial" - law is available @ Cornell's LII Site. Here's a list of every Federal Agency, and the who, what, where of proposed federal regulations.

Nothing nefarious except the consistently falling standards of education in this country. And of course the public's lack of interest.

To come up with examples where their ability to dictate areas of our lives went beyond even regulations. Perhaps a better example is Mass media dictating community standards by selecting which issues to emphasize and how they they are emphasized. It's not a law on any books, but just try to consistently get pro union messages on prime time TV.

They have influence which affects our culture way out of proportion to their numbers.

. . their ability to dictate areas of our lives . .

I'd put that group at less than 10% of the total population. The trick is to convince enough of the other 90% that our institutions are not acting in our best interests. Not easy.

Also note that this medium is the cheapest, most effective counter-balance to the entrenched "dictators", but so far has not been used effectively.

the power is "unofficial" and not really understood well by most -- but the results of the power is very "official" as in the government regulations the powerful rich manage to get written into legislation through their often well compensated servants, congress.

but his The Politics of Rich and Poor is still an amazing read.

Also, I am due for a reread of William Greider's The Secrets of the Temple: How the Federal Reserve Runs the Country his 1987 tome that pretty much lays it all out... especially important since just this Monday, Bernanke pretty much acknowleged publicly that he / Paulsen / Bush just gave the Fed (through the tool of the Plunge Protection Team) plenary powers.

Unrelated, and yet, oh so timely:

Iceland's Bell by Halldór Laxness (first published between 1943-1946)

It's not an easy read but it's so highly entertaining at times that it's worth the effort. Maybe it's just the mood I find myself in these days (cynical) but I took the title to mean that it was quite literally a wake up call to humanity. (I don't think anyone listened)

We humans keep repeating the same miserable mistakes over and over again.

I followed your link to Amazon and found this review to give me a key as to how to prepare for reading Laxness's novel:

But the scene for most of his work, and most of the book "Iceland's Bell", is his native Iceland, which he knows to the smallest crevice of space or time. This novel is set at the end of the 17th Century, when Iceland was the grittiest outpost of the Danish Kingdom, a land of stark poverty and stubborn self-image. This was the era when the Icelandic sagas were rediscovered by antiquarians; one of the chief characters is in fact a collector of fragmented manuscripts from cow sheds and church cellars across Iceland. The effort rescued from oblivion all the sagas that we now cherish, at the cost of looting them from Iceland to museums in Denmark and England.

A little familiarity with the style and content of the Icelandic sagas is of great help in understanding Laxness's novels,especially "Iceland's Bell". Perhaps more than a help, almost a necessity, like a little knowledge of the Christian Bible is a necessity for appreciating Milton, Melville, or Mann. Laxness's style comes straight from Njall's Saga - hard-bitten, no fluff, grimly humorous, highly allusive.