3 Things 1-27-25

 Thing One

Reagan Told Us The Secret About Corporate Taxes

"...The government has only two ways of getting money other than raising taxes.  It can go into the money market and borrow, competing with its own citizens and driving up interest rates which it has done, or it can print money.  And it’s done that.  Both methods are inflationary.  We’re the victims of language.  The very word inflation leads us to think of it as just high prices.  Then, of course, we resent the person who puts on the price tags forgetting that he or she is also a victim of inflation.  Inflation is not just high prices.  It's a reduction in the value of our money.  When the money supply is increased but the goods and services available for buying are not, we have too much money chasing too few goods.  Wars are usually accompanied by inflation.  Everyone is working or fighting but production is of weapons and munitions, not things we can buy and use.  Now one way out would be to raise taxes so that government need not borrow or print money.  But in all these years of government growth, we’ve reached – indeed surpassed - the limit of our people’s tolerance or ability to bear an increase in the tax burden.  Prior to world war two, taxes were such that, on the average, we had to work just a little over one month each year to pay our total federal, state, and local tax bill.  Today we have to work four months to pay that bill.  Some say shift the tax burden to business and industry.  But business doesn’t pay taxes.  Oh, don’t get the wrong idea, business is being taxed so much that we are being priced out of the world market.  But business must pass its cost of operations, and that includes taxes, on to the customer in the price of the product.  Only people pay taxes – all the taxes.  Government just uses business in a kind of sneaky way to help collect the taxes...”

Remember that when your favorite (or unfavorite) politician talks about raising corporate taxes as a way of helping you out.

Thing Two

Milton Friedman On The Role of Government

"...I’m not an anarchist.  I believe in a government. But a limited government.  And the government should be limited, in my opinion, to very simple functions. 

Number one, to defending the country against foreign enemies.  I’ve tried for a long time to see how to make national defense a private enterprise and I’ve never succeeded.  It’s easy to see how to privatize schooling but I don’t know how to privatize national defense.

A second function of government, and one which it performs very, very badly, is to protect the individual citizen against abuse and coercion by other citizens. To keep you from being hit over the head, mugged on the street, your house broken into, and so on.  And I believe that the government performs that function very ineffectively because it’s doing so many things it has no business doing.

A third function, a very important function, is to define the rules of the game we play.  What’s private property?  If an airplane flies 10,000 feet over your house, is he violating your private property?  If he flies 10 feet over your house, is he violating your private property?  There’s nothing natural about where the line would be drawn so we have to have some mechanism for making the rules about that, and that is an appropriate government function.  

And fourth, it’s appropriate for government to provide a mechanism for adjudicating disputes about the meaning of those rules – a judicial system.

Those are the four essential functions of government in my opinion.  And those are the only functions that are essential.  There may be some areas in which if you started with nothing more than that, government might conceivably do more good than harm.  But from where you are now, if you could only move back in that direction, it would be marvelous..."

Thing Three

Just A Thought 

"The smallest minority on earth is the individual. Those who deny individual rights cannot claim to be defenders of minorities." – Ayn Rand