Tag Archives: charity

“Economic Patriotism” — oxymoron.

http://blogs.wsj.com/moneybeat/2014/07/25/mark-cuban-on-tax-inversions-if-you-move-overseas-im-selling-your-stock/

So the President has been making noises about a few businesses that have decided not to be “American” for tax purposes. Then Mark Cuban steps in and says he won’t do business with those that do that.

And all that’s fine. But both are suffering from a fundamental misunderstanding of how all this rally works and their resulting misplaced expectations.

The correct expectation would be that people act in their best interests. For example, if it costs more in taxes to do business here than anywhere else, then yes, we should expect some number to go elsewhere. Patriotism doesn’t enter into the equation.

That said, if enough people, like Cuban, were to decide that they won’t do business with them because of such a decision, that also has to factor into best interest–its unlikely to ever generate enough participation–boycotts are historically ineffective. But if it were, it still has nothing to do with patriotism.

So the only effective coercive measure is law, which is what the President is talking about. Usually only totalitarian governments have to use force to keep their population from leaving the borders. Taking such action would seem to me to reduce patriotic feeling generally. And if force must be employed, then the subjects of that force are still not behaving patriotically.

The entire concept of “economic patriotism,” then, is only a pleasant sounding oxymoron not unlike trying to equate social programs with charity.

Some say that none of this “self interest” should matter. Businesses should be about giving back through paying taxes… Taxes are not “giving back.” Giving back is public service and community involvement–things that most businesses already engage in. Those activities also have the virtue of being voluntary–voluntary being the defining element of “giving back.”

Taxes are not voluntary. They are taken by threat of violence. Some level of taxation is appropriate but every individual decides what that level is for themselves. When it gets higher than they like, they take some action, from ramping up charitable giving, seeking out missed deductions, to refusing promotions or raises, to cheating on their filing or not filing at all. Or even moving somewhere else with a lower tax rate.

Personally, moving to Texas was a great move for me on taxes. Having done so doesn’t make me less Oklahoman. Oklahoma remains the community to whom I “give back” the most by time and talent in the National Guard.

The thing is, legislation has one constant effect–it changes the locus of decision making from the person to the legislature. It is a substitution of judgement–lawmakers know better how things should be then, well, everybody else. Every one of these laws, collectively, reduces the liberty–the ability to make one’s own choices– of the population. In a country like our, predicated on maximum liberty–when that is the foundation of patriotic feeling–how can an abundance of coercive legislation fail to erode patriotic feeling?

The difference between the voluntary “giving back’ and the coerced taking by taxation. If I give $1000 to a guy on a street corner–that’s me being charitable and the act is attributable to me–he had nothing to do with it. If the guy on the street corner takes $1000 from me, that’s theft and the act is attributable to him–I had nothing to do with it. Even if he provides me something in return, say an assurance that no one else will steal from me, its still theft.

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