Category: Uncategorized

Taxation: The First 10,000 Years — Part 2

As we’ve already seen (Taxation: The First 10,000 Years) taxation as been around as long as humans have gathered in groups of more than one.  It is one of the two absolute certainties of life.   Not only that, but, throughout most of history, the financial arrangement between the taxer and taxee has remained the same.  In essence, I, the taxer will determine how much tax you will pay and when; you, the taxee, will pay it.  Also, I, the aforementioned taxer, will spend the money any way I please, and you, the aforementioned taxee, will shut up about it and go back to work.  It wasn’t an optimal system, but it served us well for thousands of years.  In that time, there has only been one fundamental change to the tax structure — but it was a biggie.  Around 250 years ago, a bunch of wealthy Virginia famers got together with a crew of Boston lawyers and compared notes.  They took a look at their W2s (or the colonial equivalent) and said, “Hey!  Wait a minute!  That’s our money.  We’re not getting half the good stuff we’re paying for.  What’s the deal?  Come on, George!  Treat us right or give us back our sixpence.”  They convinced the local populace that taxation without representation was tyranny, a novel idea at the time, but one whose time had apparently come.  After the revolution, the American experiment with democracy and taxation with representation caught on.  For the next 200 plus years, it was the ideal (with a few notable exceptions) that most societies strove for.  That was then; this is now.

For the last several years, we have been going through another fundamental change in our tax structure.  We are slowly turning taxation with representation into representation without taxation.  This metamorphosis hasn’t been as abrupt as the American Revolution but it is taking just as firm a hold on most western societies.  The will of the people to determine just how and why their money is spent is being eroded to the point that representative democracy itself is at stake.

You don’t have to look any further than last year’s Occupy Whatever! movement.   This fair weather protest, with its Eat the Rich branding slogan, shifted our society back into a class warfare skid.  The influence of several thousand vocal protesters vastly outdistanced their financial ability to pay for the changes they sought.  Now, eight months later, on the verge of another protest season, taxing the rich has become a mantra in most government circles.  Agree or disagree with the Occupy Movement; their ability to set the political agenda is a game changer.  Yet their contribution, in terms of sheer numbers alone, is minimal.

It works the same with non-profit organizations.  They are increasingly using the money they raise not just to fund their organization and the work they do but also to directly influence lawmakers for legislation favourable to their cause.  The National Rifle Association is a perfect example of this; so, too, is ACORN, regardless of what they’re calling themselves this week, or the Keystone Pipeline lobby which is trying to leverage both sides of the political spectrum.  But that’s the point: single issue politics, fueled by tax-deductible donations, have found a way to punch far above their weight class in the halls of power.  The problem is these one trick ponies aren’t interested in the common good; they simply want to protect their particular interests.  That’s why they’re called special interest groups, and their influence is growing.  Lobbyists in America now outnumber lawmakers!

This is happening all over the western world.  In Canada, the Fraser Institute, a declared conservative think tank produces right wing policy papers while denying any political agenda.  Tides, a Canadian subsidiary of an American environmental group, has focused its vast resources on local elections, targeting candidates unfavourable to its cause.  Both of these groups enjoy tax exempt status!  In France, vocal and violent farmers have parlayed their small numbers into enough power to receive far more in agricultural subsidies than they ever pay in taxes.  This financial support is not only paid for by the general public, but it is also keeping food prices artificially high.  The ripple effect of this incedible arrangement is being felt throughout the European Union, and to a lesser extent the entire world.  Also across Europe, public service unions, whose wages and benefits are paid for by tax revenues, are increasingly waging war against austerity measures meant to stave off national bankruptcy.   Again, one-issue politics are trumping the common good.

As this new idea of representation without taxation gains credibility in our society, the results will be disastrous.  With no financial stake in the game, who will care how much money is spent or on what?  Waste means nothing when somebody else is picking up the check.  Even as we speak, we’ve already mortgaged our children and grandchildren to maintain a non-renewable lifestyle.  And all those pet projects of all those groups with loud voices and serious financial backing are taking precedence over the mundane work of government.  Sewers aren’t sexy.

This is a new tyranny, built on the ubiquitous special interest group.  Like the splendid kings of old, they don’t care where the money comes from.  They want their monuments built.  They see it as their right to have what they want, when they want it.  And, like those splendid kings, they will bankrupt our society with their excesses.

Friday: How the New Tax Structure Works

 

Food for Nukes: Another Bad Idea

There comes a time in every person’s life when they just want to get back into bed, turn the heating pad up to 9 and stay there for a week or two.  It’s that terrible time when you realize everything sucks and nobody’s even trying anymore.  Last week was one of those weeks; the only thing that saved it was St. Patrick’s Day.  It’s amazing how much stupid can be crammed into seven 24 hour days.

When the headlines catch you under the chin, the only thing you can do is roll with the punch.  In a not-so-surprising move, North Korea announced that it was going to test a long-range missile.  Big deal!  The North Koreans have been rattling their sabres ever since Joe Stalin sent the Red Army south of the Yalu River in 1945.  In 1950, the Asian Cold War caught fire when North Korea invaded South Korea and President Truman sent Twenty-Star-General Douglas MacArthur to slap some sense into Kim il-Sung — this current guy’s grandpa.  After three years of back and forth fighting (encapsulated for most Americans by 251 episodes of M*A*S*H) everybody was pretty much back where they started.  The two Koreas then settled in and have spent the last six decades picking at each other like two kids in the back seat of a cross country mini-van vacation.  In other words, this current Kim isn’t exactly breaking new ground in the dictator department.

North Korean long range-missiles are a problem, but they’re not the problem.  Buried inside the news item is America’s response.  Apparently, if North Korea tries to test this long-range missile, America will stop shipping food to the northern Hermit Kingdom.  Whoa!  Let me get this straight!  America’s been shipping food to North Korea???  Which Brainiac in the State Department thought that up?  And when did this diplomatic sleight-of-hand become accepted foreign policy?  I cannot believe this.  It’s so astounding I’ve run out of rhetorical questions.

Check it out!  North Korea, a nation notorious for internationally jerking people around, is sitting on a pile of plutonium (Where did they get that from?  West Edmonton Mall?) and America is shipping them tonnes of food every month so their people don’t starve.  I am not opposed to feeding hungry people, really I’m not, but it strikes me as counterproductive to be sending food to a nation that has been spending billions on a nuclear weapons program.  Hold it right there, Kim Whatever-Your-Name-Is!  How about ponying up some bucks for a couple of orders of Kimchi and rice for the general population?  Not only that, but the nuclear weapons program North Korea’s been building — on the starving peasant plan — is pointed directly at two of America’s most important allies in the region: Japan and South Korea.  This doesn’t scan — not even in Cloud Cuckooland.   But wait!  There’s more!  There’s firm evidence that the North Koreans have been exporting their nuclear technology to such world class malcontents as Ahmadinejad in Tehran and everybody’s favorite bad guy, Bashar al-Assad in Damascus.  I’m sure somebody in the State Department must have heard of these boys.  They’re the ones who want to make Tel Aviv glow in the dark.  The logic here escapes me.  It’s like picking up the tab for lunch so the guy you’re sitting with can buy a gun to mug your best friend.

I don’t know what went off the rails in the talks between America and North Korea last month in Beijing.  American statesmanship isn’t always the brightest light on the diplomatic Christmas tree.  However, it’s a good thing nobody told the American people what their State department was up to.  There might not be that many folks in New Orleans or Detroit etc. who have ever heard of Danegeld*, but they know a protection racket when they see it.  There can’t be a lot of Americans — who are about to pay their taxes in less than a month — very pleased to hear that they’ve been buying dessert for North Korean nuclear technicians.

The problem with extortion is it gets easy.  It’s easier to throw money at the problem than do the hard work to fix it.  Unfortunately, the problem remains.  As Rudyard Kipling once wrote:
“That if once you have paid him the Danegeld,
You never get rid of the Dane.”

Sending food to North Korea is one of the Top Ten stupidest things I’ve ever heard of.  Benjamin Franklins are not going to get rid of North Korea’s nuclear capability.  However, what they are doing is propping up a repressive regime and giving Kim and his military buddies time and space to go nuclear adventuring around the world.  It makes me wonder is there’s anybody even driving the bus anymore.

*For those unfamiliar with 10th century Nordic history, Danegeld was a special tax levied on the people of England and France.  It was collected and paid directly to the Vikings so they would play nice and take their rape and pillage somewhere else.  It went on for generations.

 

Kony 2012: Capitalism at Work

I’m never going to die of old age.  Long before I’m reading the news by the light at the end of the tunnel, I’ll OD on irony and drown in a pool of my own WTF sarcasm.  The latest attack on world congruency comes from the cutthroat capitalists in the marketplace of International Aid.  Last week, in a brilliant bit of modern marketing, a new product was introduced and everybody from South Africa to Somalia is now scrambling to reposition themselves.  It’s an industry shift worthy of Apple’s introduction of the iPad3 and the ramifications are going to be felt for a long time.  Brace yourselves, folks!  It’s going to be a bumpy ride for the sympathy business south of the Sudan.

For those of us old enough to remember The March of Dimes, Hallowe’en UNICEF boxes and Lotta Hitschmanova, it always comes as a shock to be reminded that compassion has become big business.  Back in the day, charity began down the block and travelled on pennies and pop bottle deposits.  The Red Cross always showed up first when all hell broke loose somewhere in the world, and to cover things in between disasters, Miss Anderson’s second grade class sponsored a child in Guatemala who dutifully sent back drawings for the bulletin board.

These days, however, charity (especially the international variety) is no longer a nickel and dime operation.  As traditional industries dry up or find themselves outsourced or regulated out of business, new not-for-profit enterprises are taking their place.  The empathy industry has attracted some of the best and brightest of our recent graduates who are now boldly exploring this new capitalist frontier.  These young entrepreneurs have taken to the emerging marketplace of International Caring and Sharing like 19th century railroad barons.  Their NGOs work on integrated multinational webs that stretch from offices in New York, London or Chicago through various lines of communication to villages and crossroads all over Africa, Asia, South and Central America.  Their corporate reach is vast, and their financial power on the ground huge.

The irony is, of course, that the trade in compassion may be the last bastion of pure capitalist thought outside of China.  It is one of the few industries left that lets the marketplace decide who thrives and who does not survive.  Here’s how it works.  There is an ever-decreasing limit to Western middle class discretionary spending.  That money can only be split so many ways.  Every charity is in competition with every other charity for a share of it.  (Right alongside iTunes and the local Cineplex, I might add.)  The organization whose message is clear and compelling will increase their market share, but usually only at the expense of someone else.   If this continues for any length of time, that someone else might just as well fold up their laptop and go home because, without donations, you’re out of the charity business.

That’s why when Invisible Children introduced their new product, Kony 2012, into the marketplace, everybody in the industry sat up and took notice.  Kony 2012 came with a kick-ass video that went viral, trending in the millions on Facebook and Twitter.  It even has its own app: “Joseph Kony 2012.”  It was a game changer, and overnight all the other charities were playing catch-up.  A murderous warlord with “What About the Children?” credentials and insane social media stats will suck millions away from those “oh so-o-o last week” causes established in Darfur, Rwanda and the Congo.  Kony 2012 donations, grants, poster and t-shirt sales will go through the stratosphere.  For the foreseeable future Kony 2012 is a license to print money — and that money has to come from somewhere.  .

I have a friend who got hopelessly trapped by Marx (back when Karl was still groovy.)  She maintains that the capitalist system was built on, and can only be maintained by, the misery of the masses.  Oddly, this week, I think she may be right.