Chapter 9
preclude the current generation from creating one. Their rejection of the
rule of monarchy was based on their firm belief that no generation could
be forced to sacrifice their rights simply because some previous
generation had failed to claim them, or had given them away. In the
words of Thomas Paine, “A certain former generation made a will, to
take away the rights of the commencing generation, and all future ones,
and to convey those rights to a third person, who afterwards comes
forward, and tells them that they have no rights, that their rights are
already bequeathed to him, and that he will govern in contempt, of them.
From such principles, and such ignorance, Good Lord deliver the
world!”
There is no fundamental right to continue the economic tyranny,
regardless of past court decisions and current economic policies. The
people of this generation have every right to do whatever is necessary to
reclaim their rights – to break free of the economic tyranny, even if it
requires the remaking of this great nation. The people of this generation
have a clear civic and moral responsibility to defend the right of recreation and to pass it on to the next generation and to all generations to
come. The sustainability of humanity will require nothing less.
Using Common Sense for the Common Good
If the U.S. Constitution were written today, by true scholars of today,
it would have to include an economic and ecological Bill of Rights – to
complement the civil or social Bill of Rights adopted in 1788. One of the
fundamental purposes of forming the Union, as stated in the preamble to
the Constitution, was to “promote the general welfare and to secure the
blessings of liberty for ourselves and our posterity.” Nothing today
indicates that the general welfare can be promoted or the blessings of
liberty can be secure for our posterity without constitutional protection of
the economic and ecological rights of humanity from the greed-driven
machinations of an out-of-control, corporatist economy. Lacking
constitutional protection for our economic and ecological rights, our
political democracy quite simply is not sustainable.
The drafters of the Constitution clearly meant it to be a living
document, capable of changing to meet the changing needs of the time. In
the words of Thomas Jefferson, “I am not an advocate for frequent
changes in laws and constitutions, but laws and institutions must go hand
in hand with the progress of the human mind. As that becomes more
developed, more enlightened, as new discoveries are made, new truths
discovered and manners and opinions change, with the change of
circumstances, institutions must advance also to keep pace with the
times.” (From a letter to Samuel Kercheval, July 12, 1816, and inscribed
on the walls of the Jefferson Memorial in Washington DC.)
Thomas Paine wrote, “It is perhaps impossible to establish any thing
that combines principles with opinions and practice, which the progress
of circumstances, through length of years, will not in some measure
derange, or render inconsistent… The rights of man are the rights of all
generations of men, and cannot be monopolized by any… The best
constitution that could now be devised, consistent with the conditions of
the present moment, may be far short of that excellence which a few years
may afford.” (From Thomas Paine’s, The Rights of Man).
Thomas Jefferson and Thomas Paine could not have foreseen today’s
social and ecological consequences of our blind pursuit of our
materialistic, short-run, economic self-interests. Yet, they clearly
anticipated that such “derangements and inconsistencies” would arise,
and to limit their accumulation and prevent revolution, civilized society
must at times stop and remove the yolk of our barbarous ancestors by
amending, or rewriting, the Constitution.
Even if the Constitution writers of past generations had not intended
an economic democracy, it is clear they would not have intended to
By John Ikerd, from “The Case for A Bill of Rights for Sustainability,” a
paper prepared for the “Looking Glass Retreat – The Economics of
Sustainability,” Koskie, ID, July 1998.
As I struggled to understand how society had become so preoccupied
by the pursuit of selfishness, I began to realize that part of the problem
was that we had lost any sense of common purpose. We seemingly had
abandoned the idea that we needed to work together for our common
good. Obviously, much of this way of thinking could be traced to the
glorification of selfishness by free market economists, many of whom
probably actually believed that Adam Smith’s invisible hand was still
strong and healthy. However, most mainstream economists traditionally
had been taught that government had a legitimate role to play in the
economy. Government, they said, was the means by which we pursued
the collective interest – the means by which we could serve our individual
interests better by acting together. However, all of this had changed by
the time I got back to Missouri in the late 1980s. By then, most
mainstream economists seemed to believe the primary mission of
government was to ensure uninterrupted economic growth of the private
economy, and thus, advocated privatizing virtually every public good and
service still being provided by government.
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People have been misled into believing that there is really no
legitimate need for government – that government represents something
that is done to them and not for them. Many feel their hard-earned tax
dollars are mostly wasted – lost down some government rat hole. Some
of this feeling arises from government bureaucracies, which have become
more concerned with expanding their budgets and span of control than
with providing services to the people. But current public attitudes toward
government stem largely from a conscious, purposeful attempt by
corporate interests, and the politicians they control, to keep government
weak so that corporations may continue to dominate both the economic
and political arenas of society. If the people are to wrest control from the
bureaucrats, corrupted politicians, and corporations, they must understand
the legitimate functions of government and must demand that their
government perform these functions for them – effectively and efficiently.
Skepticism regarding the role of government is not new. “The
government that governs least governs best.” This has been a commonly
held view among many in the United States since its beginning. Based on
their experiences with the British monarchy, the founding fathers were
very skeptical of the power of big government. In fact, the Bill of Rights
of the U.S. Constitution is devoted primarily to ensuring that the rights of
citizens are protected against governmental abuse. Skepticism regarding
the legitimate powers of government was a cornerstone of American
democracy.
In spite of this skepticism, the size and scope of the U.S. government
has grown throughout the history of the country. As late as the turn of the
early 1900s, the federal government was still a relatively minor
consideration in the day-to-day lives of most people in the U.S. However,
by the middle of the twentieth century, U.S. involvement in two World
Wars and the Great Depression had greatly expanded the size and scope
of its government. The role of government was broadened still further
during the last half of the century by the Cold War and missile race with
the Soviet Union and the Great Society programs of the 1960s, including
Medicare and Medicaid. By the late 1960s, we “Goldwater Republicans”
had had more than enough of big government. We wanted a government
that governed less, and most important, a government that took less taxes
out of our paychecks. However, we were slightly ahead of our time.
Ronald Reagan came to the Presidency in 1980 with a promise and a
mandate to reduce the size of government – as he put it, to “get the
government off peoples’ backs.” He used the mandate to reduce taxes,
but mostly for the more affluent, even including university professors like
me. However, he did little to reduce the overall size of government.
Beyond facilitating economic growth, most economists considered
government’s primary role to be dealing with market failures. And, by
the time I had returned to Missouri in 1988, few economists anywhere
were willing to openly admit to very many situations where the markets
had failed. Most seemed to believe there were few things that the markets
couldn’t do well – or at least couldn’t do better than the government.
By the mid-90s, I had concluded the Department of Agricultural
Economics wasn’t serving the interests of its students, or society as well
as it could, because it didn’t offer a course dealing objectively with the
legitimate role of government in providing public goods and services. I
believed the lack of understanding of the legitimate role of government
was a major problem confronting American society. The department
offered courses in agricultural policy, but these courses dealt with policy
from an historical and institutional perspective with little attention to the
legitimate functions of government. The Economics Department offered
courses in public policy, but again the emphasis was on how government
policies worked and not why we needed them. So, I designed a course
that would address public goods and services from the perspective of the
legitimate role of government in serving the public good.
I worked with a group of rural sociologists to integrate the proposed
course into a new curriculum. It was accepted, but as an elective rather
than a requirement of the new program. I prepared to teach the course
and had it listed in the official course catalogue. Unfortunately, too few
students enrolled in the course to allow me to teach it. As far as I know,
there is still no course offered at the University of Missouri that deals
with the legitimate role of government in a civilized society. However,
much of what I prepared to teach finds its way into this chapter. The
chapter covers the essential subject matter of a three-hour credit course in
college. It’s admittedly pretty dense reading – although hopefully not too
heavy for anyone who is interested in the legitimate role and scope of
government.
Government is neither inherently good nor bad. Government is
simply a means by which we may choose to work together for the
common good. If the future of humanity is to be better than the past, I
firmly believe we are going to have to learn to live and work together. A
life lived alone is a life not fully lived. Fortunately, for the most part,
living and working together is an interpersonal matter – something to be
worked out among people, face-to-face, one-on-one. However, our less
personal relationships need to be a bit more formal. For those less
personal, more formal relationships, we need government.
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Corporations want to control government, as well as the economy –
of this there can be no doubt. Corporations are no less interested in
benefiting from the government’s allocations of money collected from
taxpayers than they are in making profits from the money people spend as
consumers. The corporations are not interested in helping to design a
government to serve the public good, certainly not at their private
expense. There is some public good in serving many private interests, but
no private profits in serving the purely public good.
Corporations want to ensure that government allows them to continue
functioning with minimum constraints on their pursuit of profits and
growth. So they actively promote the idea that a government that governs
least governs best. They would prefer that government collect as little
money as possible to carry out its functions, which has the added benefit
of leaving as much money as possible at the disposal of their customers.
But failing in this effort, the corporations want to get as big a share as
possible of every dollar the government collects from taxpayers.
The government is supposed to work for the common good of the
people. If we, the people, are to be able to protect our democracy, and
our economy, from corporate control, we must reach a consensus on the
legitimate role and scope of government. And we must be willing to
enforce that consensus through the appropriate functioning of an effective
government. We must reassert the fact that this is our government;
whatever it is, we have made it – or at least have allowed it to be. In spite
of their dominant economic and political power, corporations still can’t
serve in public office and can’t vote in elections. They have no powers
other than those we choose to give them. We can control the corporations
and can even make them cease to exist – but only if we choose to act
collectively, through the institution of government.
Unfortunately, two conflicting philosophies of government make
reaching such a consensus more difficult. One sees the primary role of
government as protection of private property – the right to acquire and to
secure property; equity and justice are seen as desirable by-products of
private property rights. The other sees the primary role of government as
ensuring equity and justice; protecting one’s ability to acquire and secure
private property is a desirable by-product of an equitable and just society.
Many of the current functions of government can be justified under either
philosophy, but some government functions are consistent with only one.
Although rarely debated as this fundamental level, this conflict in
philosophies of government is at the root of nearly all debates over the
legitimacy of specific government programs and policies.
Some government social programs were cut, but the military budget
exploded, resulting in unprecedented growth in federal budget deficits.
Reaganomics may have meant lower taxes, at least for some of us, but it
didn’t mean smaller government. The Bush and Clinton years were
mostly more of the same, except that a booming economy during the
Clinton years brought increased tax revenues without increasing tax rates,
and the federal budget deficit disappeared. However, with Bush II, a
recession, a tax cut, and a war on terrorism, expanded to a war to
democratize the Middle East, the federal budget deficit plunged to record
levels, and big government continued to get bigger.
The battles will continue to rage indefinitely between the
conservatives, who want to reduce the size of government, and the
liberals, who want the government to do even more. However, these
battles tend to be fought along the lines of self-interests. The
conservatives want to be able to spend more of their own money – after
all, it’s their money. The liberals want the government to meet more
needs of more people by expanding health care, education, and social
security – after all, it’s their government.
In politics, the corporations support both the conservatives and
liberals. If taxes are cut, they want to make sure corporate taxes, capital
gains taxes, and taxes on corporate dividends are cut along with the taxes
of their customers. A tax loophole is as good as a tax cut in the hands of a
good corporate tax lawyer. The corporations want to keep more of the
profits they make, and they expect to make more profits when their
consumers have more after-tax income to spend.
On the other hand, if taxes are increased and government programs
are expanded, corporations want to make sure they continue to benefit
from those government programs, even if at the expense of real people.
Corporations make huge profits from government expenditures for
programs such as the military and public transportation. And, they are
quickly gaining control of public health care through medical insurance
and HMOs. Corporations also are actively working to gain access to
education through the proposed educational voucher program that would
allow people to bypass the public education system, and ultimately, would
fund a corporate education system. And, they are hoping to get a big
piece of Social Security, through a program that would allow people to
invest a portion of their Social Security taxes in the stock market. For the
corporation, political activism is just another means of making money.
Their financial support of both conservative and liberal candidates and
causes are nothing more than investments to ensure continued profits and
growth.
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and maintain an environment in which individuals, including individual
corporations, can acquire, hold, and accumulate private property.
In general, the advocates of government as protector of private
property oppose ownership of property by the government. They often
support this opposition to public ownership as an attempt to prevent
something called a “tragedy of the commons.” This unfortunate metaphor
has become so deeply engrained in the private property culture of
American that it is worthy of some explanation.
The “tragedy of the commons” story was told of people in a village
who owned cattle individually, but shared common grazing lands in the
surrounding countryside. The amount of common land available would
support only a limited number of cattle. However, since the land was
owned in common, each person had an incentive to graze as many cattle
as they could. It was government land, so to speak, and each villager
could use as much of it as they chose. As might have been expected, the
number of cattle in the village grew larger and larger over time, and
eventually overgrazed the land. Overgrazing ultimately destroyed the
land’s productivity and the villagers were forced to sell all of their cattle.
As each individual pursued their self-interest in using the property held in
common, government property, they collectively destroyed the value of
the property and its ability to serve the interests of anyone.
Obviously, if each person in the village had been allowed to buy a
parcel of the common property, they would have had an incentive to take
better care of their own property. Each landowner would then have had
an incentive to maintain the productivity of their land, so their cattle
would continue to have good grazing, and the land would be of value
whenever they chose to sell it. The moral of the story is that people will
exploit, and ultimately will destroy, anything that is owned in common,
i.e. by the government, and people will take care of and build up anything
that they own privately. Thus, private ownership prevents the “tragedy of
the commons.”
However, the moral of this story depends on a critical, but unstated,
assumption. The story assumes that people only realize value from things
as individuals. Implicit, in the story, there is no recognition of rational
incentives for people to act in their common interests, apart from their
individual interests. Tragedies of commons occur only in cases where
people pursue individual interests while using property that is owned in
common. Admittedly, if the interests at stake are purely private interests,
then the property involved should be private property. But if the interests
at stake truly are common interests, then property can be held in common
– without degrading or destroying it.
Those who see government as protector of private property see
democracy in the same light as a free market economy. The unspoken
assumptions are that no societal well-being exists except that which is
realized as individuals. Equity is achieved when every person has an
opportunity to do as well as he or she can under a given set of
circumstances, and justice means everyone is rewarded in relation to their
productivity. Thus, if everyone is given an opportunity to acquire private
property and receives private property as an equitable reward for their
productivity, they will have the necessary incentive to become productive
individuals, and consequently, will build a productive, successful
economy and society.
Under the private property doctrine, national defense is viewed as a
means of protecting private property against invasions from other nations.
Those who have little or no property to protect are defended equally, but
only because it would be impractical to exclude them during a time of
war. Criminal laws likewise are designed primarily to protect one’s
property. People, as well as property, must be protected because life and
health are prerequisites to benefiting from the ownership of property.
Those people without property are protected as well, although not always
equally well. It’s just easier to protect everyone than to determine who is
worthy of what level of protection based on current and potential future
value of their property.
Civil laws clearly are designed to protect property rather than people
– to win a civil case one first must have suffered some loss that has
private, economic value. In civil court, those without property, and no
potential to acquire it, can have no claim because they have had nothing
to lose. Claims for pain and suffering make no sense to those who view
protection of private property as the only legitimate role of the courts.
For private property advocates, public education is supported as a
means of ensuring that everyone has an opportunity to realize their
potential to become productive citizens – meaning citizens capable of
acquiring property. Public health programs are similarly justified as
means of protecting the productivity of human resources. Public
transportation and communications systems have been supported as
means of facilitating individual productivity and the creation of private
wealth. However, government involvement in such things has been
justified only if the job was too large, or otherwise could not be carried by
a private business. However, the private sector is now taking over more
and more of this type of public function, as many individual corporations
are now larger than most government agencies. In summary, many
people believe the only appropriate function of government is to create
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market place; these rights are to be assured equally to all, regardless of
what they have to offer for sale or are willing to pay.
If two people go into a Wal Mart, one person with a hundred dollars
and another with only ten, the person with a hundred dollars has a right to
buy ten-times as much stuff as does the person with ten dollars. Wal Mart
is a legitimately private business. However, if the same two people go
into a voting booth, one with a hundred dollars, and the other with only
ten, each person has only one vote. The voting booth is the place where
people make public decisions, where all people have equal rights. In a
democracy, we vote on matters affecting the common good, and thus, we
each have one vote – regardless of how wealthy or poor we may be. Each
person has an equal voice in making public decisions because each person
has an equal right to benefit from public goods and services.
Finally, the Constitution lays out some fundamental principles that
reflect the ethical and moral values that are held by our society in
common. These principles are the glue that holds the nation together –
the things that make us one country rather than an economic union for
facilitating trade or a treaty organization for mutual defense. These
common principles cannot be bought or sold, nor do they accrue to us as
individuals, either equally or unequally. These rights belong to the union,
to the people in common. They are neither personal property to be sold
nor rights of individuals that can be given away. These principles
characterize the nation as a whole and must be defined and protected by a
process of national consensus.
If a constitution is to be effective in providing the foundation for a
nation, it must reflect a consensus of the people of the nation. A
consensus doesn’t require unanimous approval, but consensus does reflect
something far more than a simple majority rule. A consensus means that
a dominant proportion of the people agrees with a proposition, and
equally important, that those who don’t agree with the proposition do
agree to abide by the dominant opinion, regardless of their personal
preferences. Majority rule, on the other hand, simply means people have
agreed in advance that the position held by the majority shall prevail
unless or until those who continue to oppose it become the majority. The
U.S. constitution states that amendments of the U.S. constitution must
pass both houses of Congress by a two-thirds majority and be ratified by
at least three-fourth of all states – in essence, defining a process of
reaching national consensus. It is far easier to pass laws, even laws
requiring two-thirds majorities, than to amend the Constitution. A
consensus is more difficult to achieve, and fundamentally more important,
than a majority position of the people.
All sorts of examples exist where people have agreed to share the use
of resources held in common and they voluntarily have devised means of
ensuring that those resources are not exploited. People share the use of
national parks and national forests, fisheries and wildlife, highways, and
all sorts of public facilities. They don’t exploit such common property
because they realize that they have a common interest in its protection.
They come together and devise means of preventing tragedies of the
commons. The key is to determine, which interests are individual and
which interests are common, and then to provide for either private or
public ownership accordingly.
Those who see government as the means of ensuring equity and
justice see it as the protector of the common good. They do not advocate
government ownership of all property or even most property – they are
not communists. They believe that the right to ownership of private
property is both necessary and appropriate in those cases where interests
are clearly individual in nature. But, they believe many values of society
accrue to the people in common, and not to just individuals.
This position is rooted in the first principle that people are
multidimensional – that they realize values from interrelationships with
other people and from living ethical, moral lives, in addition to the values
they realize individually and personally. They believe the quality of our
lives is affected by the way we treat other people and how we feel about
ourselves – not just by the amount of personal property we can acquire
and accumulate. Obviously, I share those beliefs and those beliefs are
reflected in my perception of the appropriate role of government. But, I
am no less objective, in this respect, than are those who believe that all
values are individual and private. Certainly, the government has an
important role in protecting private property, but it has equally important
roles in protecting the values that arise from human relationships and
from our common virtue – from living in an equitable and just society.
The U.S. democracy, by design, allows government to fulfill a
multidimensional role – although it doesn’t necessarily force it to do so.
The U.S. constitution clearly spells out the right of citizens to own private
property and the responsibility of government to respect and protect the
rights of private ownership. Clearly, the right to conduct business in the
private economy, through buying and selling of private property, is an
important consequence of our democracy. However, the Constitution also
clearly spells out that all citizens have certain rights that are held equally
by all, without regard to their ownership of property or anything of
economic value. These rights are not to be bought and sold in the private
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people interpret the Constitution differently. But, changing interpretation
is not a constitutional means of changing the Constitution, nor does it
necessarily reflect a changing national consensus. Evidence is growing
that the Constitution does not even address some critical issues upon
which a national consensus must be reached if the government is to retain
the consent of the governed. And, the Supreme Court cannot possibly
reinterpret provisions that do not exist.
The first such issue that comes to mind is abortion – the right to life
versus the freedom of choice. There is no national consensus on this
issue. The Supreme Court has ruled on abortion under “right to privacy”
provision, addressing a woman’s constitutional right to choose what she
does with her own body. Most public opinion polls have consistently
shown a clear majority of the people in the U.S. favors the current prochoice abortion laws. However, the pro-life movement makes up a
significant minority of Americans. Through continued public
demonstrations and acts of civil disobedience, pro-life advocates show no
indication of agreeing to abide by the rule of the majority on this issue.
There is no national consensus concerning abortion.
Another similarly controversial issue on which there is no
consensus is the right to bear arms. The second amendment to the
Constitution clearly states, “The right of the people to keep and bear
arms shall not be infringed.” However, a growing majority of
Americans believe the right to bear arms should be “infringed,” if not
outright abolished. In fact, the Supreme Court has upheld laws that
clearly infringe upon the individual’s right to own certain kinds of
weapons, without challenging the individual’s basic right to own
firearms. The second amendment begins, “A well regulated Militia,
being necessary to the security of free states…” which gun control
advocates interpret as a right of states to maintain National Guard Units,
rather than rights of individuals to bear arms. There is no national
consensus on gun control.
On matters of personal ethics and morality, if we are people of
integrity, we don’t buy and sell our values, and we don’t vote, or accept
anyone else’s vote, concerning what’s morally or ethically right and
wrong for us. On matters of our common ethics and moral values, we
should apply the same general principles, yet we must be willing to work
toward a national consensus. We must be willing to continue to search
for ways to carry out the private functions of the economy and public
functions of government by means that don’t conflict with our
fundamental values. We must agree to participate in an ongoing process
of reaching and maintaining a national consensus – not a consensus in the
marketplace, nor in the voting booth, but in the hearts and minds of the
people.
The drafters of the Constitution clearly meant it to be a living
document, capable of changing to meet changes in our national
consensus, as stated in the preamble to this chapter. The intent for the
Constitution to be a living document is written into Article V of the
Constitution. It states: “The Congress, whenever two thirds of both
Houses shall deem it necessary, shall propose amendments to this
Constitution, or, on the application of the Legislatures of two-thirds of the
several States, shall call a Convention for proposing amendments, which,
in either case, shall be valid to all intents and purposes, as part of this
Constitution, when ratified by the Legislatures of three-fourths of the
several States.”
Americans have added only twelve amendments to the U.S.
Constitution in the past century – and one of those was the repeal of
another. The last national Constitutional Convention was the first one, in
1787 – although the six southern states that seceded from the Union held
a convention to adopt the Constitution of the Confederacy in 1861. Have
we really made so little progress in developing our minds and becoming
more enlightened in the past two hundred years? Have we actually made
so few new discoveries and discovered so few new truths? Has there
been so little change in manners, opinions, and circumstances? If so,
Jefferson and Paine would be sorely disappointed in us. Were there only
ten things that needed to be changed in the last hundred years? Or were
the politically and economically powerful effectively blocking changes to
the Constitution in order to protect their privileges within the existing
structure of government?
Some argue the Supreme Court is capable of reflecting any change in
the consensus of the people by periodically reinterpreting of the
Constitution. Appointments to fill seats on the Supreme Court are highly
prized by both conservatives and liberals because they know that different
These and other contentious issues – such as gender equity, school
prayer, desecration of the flag, and rights of gays and lesbians – are
simmering just below the surface of civil disobedience. The animosities
surrounding these issues are accumulating to the point of discouraging
reformations and eventually, perhaps, of provoking revolution, as Thomas
Paine might say. And as Paine suggested, it might be wise to handle such
issues as they arise, rather than allow them to accumulate and perhaps
culminate in revolution.
Widespread civil disobedience – a principle-based defiance of law –
is the most obvious sign of a lack of consensus among the people. When
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approved by ratification by Conventions in three-fourths of the states,
rather than by State Legislators, again at the discretion of Congress. In
cases where Congress lacks the will to act, the people have a right to ask
Congress to step aside and to change the Constitution by the legal process
of Constitutional Conventions.
However, the most important responsibility of the people, pertaining
to issues of national ethics and morality, is to commit themselves to the
process of reaching a national consensus. Our historical competitive and
adversarial approach to matters of economics and politics has all but
destroyed our ability to work for consensus on matters of ethics and
morality. We tend to be insistent that acts of concession on matters of
values are equivalent to a compromise on matters of principle – which
clearly is not true. We can move toward consensus without
compromising our fundamental principles, if we are willing to reexamine
our values.
For example, on the issue of abortion, some pro-choice advocates
demand that women have the right to an abortion, at any stage of
pregnancy, with issues concerning threat to life or health to be resolved
only between a woman and her doctor. Some pro-life advocates demand
that the fetus be given full rights of citizenship, at conception, and that its
life and health take precedent over the health, if not life, of its mother.
Obviously, the mother has basic human rights, and at some point, the
baby acquires the same basic human rights. These basic rights are matters
of principle. The questions of when a person acquires rights and how the
rights of one person are to be weighed against the rights or another are
questions of values. Our values are shaped by our religious, cultural, and
social environment, but principles are beliefs that we all share in
common.
I am not so naïve as to believe that a controversy as complex and
deep-seated as abortion can be easily resolved. But, we need to begin a
process that will lead to consensus – by making concessions on matters of
values, but without compromising on matters of principle. Such matters
of principle arise from our common sense – not from religious doctrine,
conventional wisdom, or common practice. I firmly believe that if people
come together, committed to relying on their own sense of morality –
rather than conventional wisdom or logic and reason – they will discover
a collective, common sense of what is right and wrong. Upon this
foundation of common sense, they could build national consensus.
The people of the United States need a formal process, short of civil
disobedience, by which people can raise issues on which they feel we
have lost the national consensus needed to govern. We need a process for
people are willing, openly to defy and to disobey a law of the land, and to
suffer the prescribed consequences of their acts, they obviously are not
willing to abide by the principles by which they are governed. Few, if
any, constitutional amendments affecting the rights of people have been
approved that were not preceded by acts of civil disobedience among
significant segments of the population. The abolition of slavery, right to
vote regardless of race, right of women to vote, repeal of prohibition,
abolition of poll taxes, and even rights of eighteen-year-olds to vote; all
were preceded by significant acts of civil disobedience.
Certainly, not every act of civil disobedience should be met with a
proposed amendment to the Constitution. And just as certainly, the
people of a nation should not wait for acts of civil disobedience to
propose changes in the Constitution. But, whenever large numbers of
people find they must disobey a constitutional law to remain true to their
own principles, and are willing to accept the consequences of their
actions, a nation should be willing to admit that it has lost the consensus
needed to govern on that particular issue. This does not imply that the
constitution should be amended so as to satisfy the civil disobedient. This
would only result in civil disobedience on the part of their opponents.
Instead, widespread civil disobedience means ways must be found to
reestablish a consensus among the governed, if the government is to
maintain its effectiveness in serving the common good.
The people of this country are not subjects of the Constitution or of
the government. Instead, the Constitution belongs to the people, and
thereby, the government is subject to will of the people. A constitution is
simply a document designed to reflect the consensus of the people
concerning the purpose of their union and the principles by which they
choose to be governed. The people have every right to amend or
otherwise change the Constitution as needed to reflect the changing
consensus of their nation. In fact, the people have a responsibility to
reach a consensus on issues of critical national concern. We have a
responsibility to define our national consensus, the principles which
reflect the dominate values of the people, the principles by which the rest
will agree to abide, even if we don’t completely agree.
People can lobby their legislators to introduce and pass proposed
amendments, and can lobby their state legislators to ratify amendments
passed by Congress. But, amendments can also be proposed and ratified
through a process involving special constitutional conventions.
Remember, the Constitution states that Congress, “on the application of
the Legislatures of two thirds of the several States, shall call a Convention
for proposing amendments.” It also states that amendments may be
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obvious that the founders of the American democracy believed that all
people have certain rights that are both undeniable and equal, which
include the pursuit of happiness as well as life and liberty. The also
believed that government is a necessary means of ensuring those rights.
Earlier versions of the Declaration of Independence had included the
phrase “life, liberty, and possession of private property.” However, the
Founding Fathers apparently concluded, quite wisely, the opportunity to
possess private property was not equivalent to the pursuit of happiness.
Some have criticized the pursuit of happiness statement, saying it
creates unrealistic expectations among the governed. It has been said that
Americans are the only people on earth who actually expect to be happy,
and thus, are continually disappointed. First, the Declaration states that
all have an equal right to pursue happiness, not that all, or any,
necessarily will achieve it. In addition, some people seem to think that
happiness is a goal to be achieved or some destination to be reached,
rather than a process in which one participates. In America, everyone
should have an equal opportunity to be happy in the process of living.
That doesn’t mean that everyone will achieve wealth, popularity, or
personal serenity. It simply means that everyone should have an equal
opportunity to pursue their hopes and dreams – regardless of whether they
are able to achieve them.
If life, liberty, and the pursuit of happiness are accepted as American
basic rights, they must be ensured equally for all. A market economy
gives people rights in relation to their wealth or ability to pay, not equally
to all. Thus, ensuring the right to own personal property most certainly
will not ensure the realization of those basic rights, which according to
the Constitution, are to be equally accessible to all. The government must
ensure equality where equality is a right and ensure the rights of private
property where equality is neither necessary nor desirable in ensuring the
overall well-being of society. There is a legitimate and important role for
the private sector in a democratic republic, where people are rewarded for
their productivity, and thus, have an incentive to earn money and
accumulate wealth. But, there is also a legitimate and important role for
the public sector, where people are ensured of equal opportunities,
regardless of their ability to earn or to pay.
Which goods and services should be equally accessible to all? What
is a public good and service? Again, this is a matter for the people to
decide – either directly or through their elected representatives. However,
each law that is passed to ensure equality must also be constitutional – it
must be consistent with our national consensus. Thus far, a consensus
seems to exist ensuring the equal right of all people to be defended
bringing such issues that have merit before the American people, in
organized series of local, state, and national forums – in person or through
other means of interactive communication. We need a process of
formulating and proposing alternative statements of principles that can be
put before the people for their review and reactions. All people need to
be encouraged to participate in the process – to use their individual
common sense to find a collective common sense of what is right and
wrong for the nation.
Once the people have reached a consensus, the legislative process
necessary for amending the Constitution can begin. Again, if legislators
are not willing to participate in such a process, then they can be asked to
step aside and let the process of Constitutional Conventions bring our
living Constitution back to life.
The new vision of the future of humanity is one where people live and
work in nations where the principles of government are defined by the
process of consensus rather than through compromise or political and
economic brute force. A world in which people don’t have to resort to
civil disobedience to tell their government when something is
fundamentally wrong would be a fundamentally better world. A world in
which people participate in an ongoing process of forming and reforming
their government would be a better world. A world in which the moral
and ethical values of the people are reflected in the Constitution upon
which their government stands truly would be a better world.
A good constitution is necessary for good government but is not
sufficient to ensure good government. It’s still up to the people to elect
representatives who understand what a good government is supposed to
do for the people – people who have the courage to pursue the common
good. Knowing what government is not supposed to do is just as
important as knowing what government is supposed to do. But, a
government that governs least is not necessarily a government that
governs best. People who don’t believe there is any legitimate role for
government, other than to protect and promote the private sector, are
pursuing a philosophy of government fundamentally different from that
envisioned by the Founding Fathers.
As indicated previously, the American Declaration of Independence
begins: “We hold these truths to be self-evident, that all men are created
equal, that they are endowed by their Creator with certain unalienable
rights, that among these are life, liberty, and the pursuit of happiness.”
Immediately following this well-known statement our Founding Fathers
wrote, “That to secure these rights, Governments are instituted among
men, deriving their just powers from the consent of the governed.” It is
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should have sufficient nutrition to ensure their physical and mental
development. The USDA Food Stamp program and various state and
local social welfare programs are targeted to carrying out this consensus.
The private markets provide food only for those who can afford to pay for
it. Ensuring that everyone has access to enough food to survive is a
legitimate public service.
The consensus concerning social welfare programs in general is not
as clear as for food programs. The consensus seems to be that everyone is
entitled to some minimal level of government support – if they truly need
it to survive. But, no consensus exists concerning the level of support
necessary or the conditions under which survival becomes the
responsibility of government rather than the responsibility of the
individual. The Great Society programs of the 1960s placed a strong
responsibility on government to eliminate poverty. Welfare to Work
reform program of the mid-1990s placed greater responsibility back onto
the individual and less on government. So, we have a consensus that
welfare of the poor is a legitimate public responsibility, but we have yet to
agree on the best means of meeting that responsibility.
A consensus that everyone in America should have access to some
level of health care services seems to be emerging. We have already
agreed to provide health care to retired people, through Medicare, and to
poor people, through Medicaid. Currently, public programs are being put
in place in some states to ensure adequate health care for all children,
regardless of the ability of their parents to pay. We seem to be moving
toward universal health benefits, but still have wide disagreements
concerning how it should be provided. Disagreement on the means seems
to be standing in the way of consensus on the desired end of adequate
health care for all. But, we seem to be moving toward a consensus that
some level health care is a legitimate public good.
This is not an exhaustive list of legitimate public goods and services.
But, it should be enough to provide some useful insights into the process
by which society has decided which goods must be provided by the public
sector – i.e. by government. Although the debates may not have been
framed in the language of consensus and equity, in each case, society in
general has agreed that these things must be equally accessible to all –
regardless of their ability to pay.
In addition to providing public goods, the government also is
responsible for protecting the people against the public bads. The people
of a democracy have a right to equal protection under the law. These
rights are generally understood and accepted as a legitimate function of
government. Many of our moral and ethical principles are encoded into
against foreign aggression. I don’t really believe the arguments that the
American people would exclude those who have no property from
national defense, if it were not too costly to do so. However, the fact that
some have far more personal property to be defended than do others
seems a reasonable justification for assessing some people far more than
others for the total costs of national defense. But, all have an equal right
to be defended, regardless of how much, or whether, they contribute to
the cost of national defense. So we pay taxes to support the military
services. Nearly everyone agrees – national defense is a legitimate public
service.
Most agree that public transportation – including highways, roads,
and bridges – is a legitimate public service. Everyone should have an
equal right to move about from one place to another. So, governments
not only build roads that all people may travel, but in many cases,
governments subsidize other means of mass transportation. Although we
may disagree about the amount, most willingly pay taxes to build roads
and support pubic transportation, thus confirming that transportation, in
some form, is public goods and services.
We also have reached a national consensus that education should be
equally accessible to all. We do not necessarily agree on what level and
type of education is to be a public service, nor is there universal
agreement on how best to provide public education. But, most agree that
an educated society is essential to maintaining an effective democracy as
well as a productive economy. Schools are financed mostly through state
and local taxes. So, the quality of education may vary a good bit from
one place to another. But, there seems to be general agreement that
education is a legitimate public service.
Social Security is another popular public service program. The first
government funded old age pension programs were established during the
Great Depression, when old people were actually starving and dying in
the streets. The people of this nation concluded that it was intolerable to
live in a society where old people are allowed to suffer and die, just
because they haven’t accumulated enough wealth during their working
years to support themselves after they can no longer work. The private
sector provides retirement income only to those who are able to earn and
save enough to ensure retirement benefits for themselves. So if everyone
has an equal right to survive during old age, the government must ensure
it, either through Social Security or some other form of assistance for the
elderly.
We also seem to have reached a consensus that all people have the
right to some minimal level of food, and that all children, in particular,
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If someone infringed on the private property rights of their neighbors, it
was a matter to be settled between the two of them, perhaps in court, but
nonetheless, still a personal matter.
Today, as is obvious to most of us, humanity possesses technologies
capable of seriously degrading, if not destroying, the planet – or at least
making it uninhabitable by humans. Protection of the biosphere, so that it
will continue to sustain human life on earth, has become an issue of
common interest because it involves the common good. Individual acts of
stewardship are no longer sufficient to ensure long run sustainability of
life on the planet, because the economic incentives for exploitation are too
strong. Corporations have no sense of ethics or morality, thus they have
no incentive for true stewardship, and corporations are gaining control of
more and more of the Earth’s resources. Eventually, there must be a
national consensus to protect the environment, if we are to build a
sustainable society.
Another whole class of public goods and services exist, which I will
call collective purchases, which are only incidentally related to issues of
equity and justice. Collective purchases are things that we choose to buy
collectively, rather than individually, just because it is more practical to
do so. These are public goods in the sense that we all have an equal right
to them, but only in the sense that government is the most practical – i.e.
least cost, most convenient, only feasible, etc – way to obtain them.
Interestingly, economics considers nearly all public goods and services to
be collective purchases, because economics simply doesn’t deal
effectively with issues of equity and justice.
The government makes collective purchases of most legitimate public
goods and services, simply because it is more efficient or less costly to do
so, but the fact that they are purchased collectively does not make them
public goods and services. For example, it doesn’t make much sense for
people to use vouchers or tax credits to buy their own tank or missile, to
build little pieces of highways, or hire a teacher part-time to educate their
children. But, we choose to buy many other goods and services
collectively, such as electrical power, communications systems, water and
sewer lines, parks and recreation facilities, etc. that are not inherently
public in nature. These things become equally accessible to the public
only because they were bought with public tax dollars or because it’s
impractical to exclude or limit those who don’t pay their share.
In many cases, collective purchases could be made through private
organizations, rather than through the government. In some cases, private
for-profit and non-profit organizations do make such purchases.
However, particularly in cases where individual interests are easily
criminal and civil laws, such as those against committing murder, assault,
robbery, and fraud. In general, we have laws against sins, but only if they
affect other people. It is not against the law, for example, to commit
adultery, to lie about personal matters, or to hate another person. Where
criminal laws exist, society has reached a consensus that a victim has a
fundamental right to be protected
Some may ask why it is necessary to have laws if society has reached
a consensus. The answer: because a consensus is never complete – some
people will never choose to abide, perhaps are incapable of abiding, by
ethical or moral values of the society in which they live. Those who have
worked for and have reached consensus must be protected from those few
who refuse to participate in the civil processes of self-governance or are
incapable of self-restraint.
We also have reached a consensus that everyone has civil rights –
rights to be treated equally, as an individual, without regard to the specific
group, or groups, by which they might be identified. Thus, everyone has
a right to be protected, in all public matters, against discrimination based
on their race, gender, ethnicity, age, physical ability, or sexual orientation.
Individuals do have the right to discriminate against individuals – we
don’t have to treat everyone the same in public, or even to do business
with everyone. But we don’t have the right to treat any individually less
equitably, just because they are members of some particular group. The
government has a responsibility to enforce a national consensus against
systematic discrimination.
I believe a national consensus is emerging with respect to protecting
the natural environment. I have mentioned this issue before and will have
more to say about it later, but protection of the environment is
fundamentally an ethical and moral issue. Protection from the negative
effects of pollution on health and quality of life may be a matter of
protecting one’s person or private property from being damaged by
another. Protecting natural resources held in common for the edification
and enjoyment of the public may be a matter of managing public goods
and services. But, protection of natural resources for the benefit of future
generations is an act of stewardship – taking care of something for the
sole benefit of someone else. True stewardship is an ethical, moral act.
Until fairly recently, stewardship was considered to be a personal
matter – a matter of individual values and personal choice. As long as
humanity seemed technologically incapable of damaging the earth beyond
its ability to restore and regenerate itself, anything an individual did to
their immediate environment was considered a personal matter. “It’s my
land and I can do whatever I please with it,” was the prevailing attitude.
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out of the public domain and hidden in the private accounts of
corporations. In addition, the ability of the public to control exploitation
is virtually eliminated by inappropriate privatization.
Government has many additional legitimate public functions. Among
the most important is oversight of the private sector. The government is
our only means of restoring the competitiveness to markets and restoring
capitalism to the private sector of the economy. Workable competition
has become the economist’s apology for the corporatist economy. They
claim if we restored true competition, there would be too many producers;
businesses would be too small to realize economic efficiencies of size,
and costs would be too high. But with corporatism, we have no assurance
that what is being produced is what consumers need, or actually want, and
with monopolistic pricing, we have no assurance that any cost savings are
passed on to consumers.
Economists claim that it is more efficient for the large corporations to
coordinate all of the functions involved in transforming raw materials into
finished products – that vertical integration is more efficient than having
vertical layers of free markets and competitive production at each level in
the production process. But, economists don’t tell us that what they are
actually advocating is corporate central planning – a core concept of
communism. Some of the multinational corporations today are larger
than many national economies. We should know by now that central
planning of an economy is an unworkable idea – regardless of whether it
is carried out by a corporation or by a government.
With restoration of competitive markets, at all levels the system, the
invisible hand would be restored, and markets would again serve the
needs of individuals within society. The government must provide those
things that are legitimate public goods and services. However, neither the
government nor the giant corporations are capable of providing those
things that are legitimate private goods and services. An efficient,
competitive private sector is the only logical means of providing private
goods and services. And, only the government is capable of ensuring that
the private sector of the economy works for the collective good by
restoring competitiveness to private markets.
Most will agree that government is necessary – although they may
disagree about how big it should be, what form it should take, or what it
should do. The question of how to pay for government also springs
quickly to the minds of most people. Everything a government does must
be supported by taxes. Taxes are compulsory contributions of money
made by the people who are governed to support the functions of their
government. Under an effective representative democracy, the people,
separated and the number of payers and benefactors is large, it’s just more
convenient to make such purchases through government. The advocates
propose the purchase through appropriate government processes, and if
approved, the purchase is paid for out tax dollars. The public is then
eligible to benefit from the purchase.
A common justification for government involvement in purchases of
good and services in the past were associated with what economists called
natural monopolies. Natural monopolies included such things as
electrical power lines, telephone and telegraph lines, railroads and
highways, sewer and water lines – things where the costs of building the
infrastructure needed to deliver the product was very high in relation to
the value of the service provided. It is simply impractical to run three or
four power lines or phone lines to every house, to build two or three
parallel railroad beds, or to run a half dozen different water or sewer lines
all around town. Obviously, the company that built the first one of any of
these things would have a natural monopoly, because no one else could
afford to build another with the promise of only half of the market. Or the
new company would have to count on eventually driving the old one out
of business. In such cases, government intervention prevented the
development of monopoly. Government would build the necessary
infrastructure and provide the service, or they would grant the right to
provide the service to a private company but would regulate the quality
and price of the service. Since the company granted the right would have
a monopoly position in the market, there would be no competition to
ensure quality of service or a competitive price.
In recent years, economists seem to be far less concerned about
monopolies, natural or otherwise, than in the past. The emphasis today
seems to be on privatizing everything, regardless of the implications for
competitiveness. Some high-profile examples are deregulation of
railroads, airlines, communications systems, and cable television. The
state of California even privatized electrical power – with some shocking
results for ratepayers. Locally, perhaps the most questionable current
practice is the sale of hospitals, many of which were built with public
funds to provide a public service, to corporate health care providers who
have no legal responsibility to provide equal access to healthcare.
Interestingly, increasing popularity of privatization of government
services has paralleled the loss of interest by the government in enforcing
antitrust rules against corporate consolidation. Apparently, no task is
considered too large to be turned over to a private corporations, – even
many of the tasks in fighting a war. The only thing accomplished by such
privatization of natural monopolies is that waste and corruption is taken
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Such taxes may be assessed to the provider of the service, but ultimately,
they are passed on to the user.
The cost of public facilities and services meant to be freely accessible
to all can be assessed to those who benefit economically from having such
services available. Property taxes might be the logical choice to support
parks and recreation facilities, for example, as the availability to use such
amenities invariably enhance the value of property in the vicinity of such
facilities.
The costs of ensuring and protecting the most basic rights to “life,
liberty, and the pursuit of happiness” should be shared broadly across the
whole economy. It seems logical that national defense, law enforcement,
education, and health care might fall most clearly in this category. So, it
might be reasonable to support the costs of such services through a valueadded tax – a tax assessed as a percentage of the increase in value of a
product at each stage of production. The benefits of such services accrue
to all; individuals and businesses alike benefit from an equitable and just
society in which all have an opportunity to succeed. With a value added
tax, businesses pay the taxes to the government, but the cost of tax also is
reflected in the prices paid by the final customer. The cost of such taxes
is shared between businesses and the buying public, with relative shares
depending on the nature of supply-demand relationships at various stages
of production.
Each business involved in a production process would deduct costs of
purchased inputs – including employees’ wages and salaries, interests on
borrowed money, and rent for production facilities – from the market
value of products sold and pay taxes on the difference. The value of
output at one level of production would represent cost at the next level of
production. The net result would be a tax on the total value of production.
Each business involved in the production process would have paid taxes
in proportion to the amount of gross income that they received from, and
the amount of value they added to, the total production process. The final
customer pays a price, which reflects added costs of taxes at each level of
production.
A similar tax might be levied on services, including such things as
brokerage fees, consulting fees, and legal fees, as well as products. Total
collections from value-added or gross margin taxes would then represent
a percentage of the contribution of the business sector to total national
value of production, or Gross Domestic Production – the broadest
measure of economic activity. All taxes on businesses, including
corporations, partnerships, and individual proprietorships, could be
assessed as value-added taxes. The broadest, most inclusive functions of
through their elected representatives, decide what functions they want
their government to perform, and at the same time, decide how much and
what kinds of taxes they are willing to pay to support those functions.
In the United States today, most people seem to perceive that the
government decides what it is going do and then decides how they are
going to tax the people to support their spending. If the government,
rather than the people, actually is making the tax-and-spend decisions in
America today, it is only by default. The people have the right not only to
decide what they want their government to do, but also to decide how
they want to pay for it.
Obviously, there are better ways to pay for public goods and services
than the system that we have in place in the U.S. today. For example, no
one can defend the current system of income taxes in terms of equity,
certainty, convenience, efficiency, simplicity, or by any other logical
criterion for fair taxes. In general, existing tax laws today are defended
by those who benefit from the biases obscured by their complexity –
mainly, tax lawyers and the politically and economically powerful who
hire them. Ordinary people don’t understand the tax system, most can’t
fill out their own tax forms, and they don’t have a clue as to how much
they are subsidizing the rich and powerful with their hard-earned dollars.
In general, systems of taxation should be simple, straightforward, and
sensible – they should make common sense. Taxes that don’t seem to
make sense on the surface quite likely don’t make sense, period. First,
virtually all taxes are paid in dollars and cents, so all taxes are paid with
funds derived from the private economy, by one means of another.
Whether paid by a corporation, a partnership, or an individual, money
must be earned in the private economy before taxes can be paid. The
question is who to tax and how much to tax them, to support which public
goods or services.
To me, it seems logical that tax collections should be linked as closely
as possible with the government goods and services for which they are
collected. In cases of collective purchases, it’s fairly easy to link the
public good or service with something that can be taxed. For example,
electrical power, communications systems, and water and sewer lines can
be supported by taxes on those who benefit most directly from the service
– as is generally the case today. Gasoline and other motor-fuel taxes are
legitimately used to help pay for highways, bridges, airports and other
public transportation services. However, some portion of transportation
services are meant to be truly public services, rather than collective
purchases, thus the full cost should not be born by users of the service.
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average rate. We have a national consensus that no one should die of
starvation, that everyone should have clothes to wear and a roof over their
head, that everyone is entitled to some minimal level of income. So, why
shouldn’t we give tax credits, equal to a poverty level income, to
everyone who works full time? The tax credit would be counted against
taxes owed, so no one would actually have to pay anything to the
government until they owed more than the amount of their tax credit. If
they earned less than the amount of the credit, the government would pay
them the difference – which some economists have called a negative
income tax.
Conceivably, such a tax system could be expanded to replace welfare,
social security, unemployment compensation, health care, minimum
wages and all other programs designed to ensure that everyone receives
some minimal level of income to cover the cost of necessities. All ablebodied people, not having child rearing or other care giving
responsibilities, would be required to work in order to qualify for the tax
credit. Childcare would be considered employment, regardless of
whether the caregiver was compensated in dollars. Part-time work,
including part-time childcare, could receive a partial tax credit. Current
minimum wages could be reduced to ensure that everyone could find a
job – as long as the higher income supplement would offset lower
earnings, leaving everyone who works living well above the poverty
level.
Let’s suppose a 33 percent marginal tax rate would pay the cost of all
of the tax credits and raise as much money in total as the government
needs to collect from income taxes, including current Social Security and
Medicare taxes. The total employee-employer contribution to Social
Security and Medicare is currently more than 15 percent, so the marginal
federal income tax rate would be less than 20 percent. I don’t know what
the rate should be, but it would be easy enough to calculate once we know
how much money the government needs to raise from income taxes. At
least, it would be far easier than making federal revenue projections under
existing tax laws.
Everyone would pay 33 percent, one-third, of everything they earn to
the government for income taxes. All deductions and exemptions would
be eliminated – all income would be taxable income. Furthermore, let’s
assume that the government credits each working adult $9,000 to ensure
than no one lives in poverty, regardless of how much they are able to earn
in the job market. The credit could be adjusted for different sizes of
families, and obviously would need to be higher for those who cannot
work. Even at $5.00 an hour, a person could earn more than $10,000 per
government should be funded through the broadest, most inclusive form
of taxes. For businesses and consumers alike, such taxes would represent
a legitimate payment for the benefit of operating and living in an
equitable and just society.
Personal income taxes could be reserved to support those public
goods and services that are most easily addressed through a redistribution
of income. Clearly, we need to rethink the whole issue concerning why
and how we tax income. For example, today the marginal tax rate on
income for the poorest people can range up to nearly 100 percent, while
the very rich pay a “marginal” rate somewhere in the 35 percent range.
The marginal tax rate reflects the percentage of each additional dollar of
income we earn that we pay in taxes, whereas the average tax rate reflects
the percentage of the total dollars we earn that we pay in taxes.
When a person currently on welfare goes to work on a minimum
wage job, say making $12,500 per year, they have little if any increase
over the amount they were receiving from welfare – depending on their
number of children. If they were receiving $10,000 in welfare benefits,
which they lose when they go to work, their additional income would be
only $2,500. The result would be an effective marginal tax of $10,000, or
80 percent, even if they paid no income tax to the government. In a sense,
four-fifths of their marginal or added earnings were taxed away, as they
were able to keep only one fifth of the additional income they earned
from working. However, if a person is already making $500,000 earns
$15,000 more, they get to keep more than 65 percent, or at least 35
percent of their additional earnings – the maximum marginal income tax
rate is just under 35 percent.
It doesn’t seem sensible for the poor to be charged a marginal tax rate
far higher than the marginal rate for the wealthy. A growing number of
conservatives are supporting a flat tax – meaning that everyone would pay
the same average tax rate. They have suggested that something in the
range of 25 percent would be adequate for federal income taxes. If so,
everyone would pay a simple, flat 25 percent of their earned income – the
marginal tax rate for the wealthy would be the same as the average, 25
percent. Of course, this would be a big marginal tax break for those who
are now paying a 35 percent marginal rate – that’s why the wealthy are in
favor of it. However, many wealthy individuals pay far less than
maximum rates because of current loopholes in tax laws, which a lower
flat rate might help eliminate. This is why some middle-income taxpayers
support the flat rate.
Perhaps instead, we should have a flat marginal tax – everyone,
including the poor paying the same marginal rate rather than the same
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and thus should be paid for from tax revenues collected at the level
receiving the services. Nothing that can be done fairly and effectively at
the local level should be done by the state level and nothing that can be
done fairly and effectively at the state level should be done at the federal
level.
The bottom line is that government is a common sense means by
which we can do things for the common good. We should demand that
our government make sense in that regard. Government should perform
functions that serve the public good that cannot, or will not, be performed
by the private sector. The private sector performs many functions that
serve the public good, such as providing employment and income.
However, the private sector will not provide equal benefits or protection
to all, but instead provides benefits or protection only to the extent that a
person is willing and able to pay the cost of providing those benefits.
The public sector must provide those things that we agree by national
consensus should be available equally to all. This is the moral and ethical
cornerstone of our democratic society, it is the essence of our national
community, and it is the foundation for our economy. We must be
willing to pay the costs of ensuring equity and justice for all, or we cannot
possibly expect to realize the quality of life that might otherwise arise
from our individual economic achievements. We must pay the rent in
order to operate the business. We must pay the costs of being good
citizens if we expect to realize the benefits of living and working in a
civilized nation.
Beyond ensuring equality of opportunity, government provides a
legitimate and convenient means by which we may make collective
purchases – by which we may buy things together that we can’t logically
buy individually. Such purchases make up a significant portion of all we
pay in taxes, particularly at the state and local level. For such functions,
decisions regarding what good and services government should provide
and how much taxes we should pay is not all that different from buying
things for ourselves. We should simply decide how much of our money
we want to spend individually and how much we want to spend
collectively. It is not a matter of how much money we spend and how
much we give to the government. Instead, it’s a matter of how much of
our money we choose to spend for private goods and services and how
much we choose to spend for public goods and services.
Yes, it is our money and we should decide how to spend it. But, we
are not wasting money when we spend it to ensure the inalienable rights
of all people. We are not wasting money when we spend it to ensure the
integrity of our democratic society. We are not wasting money when we
year in addition to their income supplement. Everyone would have an
incentive to work – and would be expected to work, if able.
Under this proposal, a single person wouldn’t owe the government
anything until their income exceeded $27,000 per year (one-third of
$27,000 equals $9,000, which would just offset their credit). At any
lower income, the government would pay them the difference between the
$9,000 credit and 33 percent of their earnings. At an $18,000 income, for
example, a person would owe $6,000 in taxes (one-third of $18,000). But
with their tax credit of $9,000, they would receive $3,000 ($9,000 minus
$6,000) from the government, raising their total income to $21,000.
Money for tax credits would be raised from positive taxes on those
earning more than $27,000 per year. For example, a taxpayer earning
$60,000 per year would owe $11,000 in income taxes (one-third of
$60,000, or $20,000, minus $9,000), and a person with a $1,000,000
income would owe $321,000 ($330,000 minus $9,000).
Such an outcome is quite reasonable, although a large percentage of
all taxpayers would pay no net income taxes at all and many would
receive an income supplement. The wealthiest 10 percent of the people
earn around half of total national personal income. These people would
be paying something close to a 33 percent average tax rate, as their
$9,000 tax credit would be offset by their income the first few days of the
year. In fact, the necessary marginal tax rate might be considerably less
than 33 percent, if deductions and exemptions were eliminated and all
current tax loopholes were closed.
I don’t know if a flat marginal tax is the best system to replace the
income tax and social welfare systems currently in place. But, I am
confident that we can do better than the system we have today.
Governments at the national, state, and local levels have different
roles and functions. Some public goods and services should be made
available to everyone in the nation, some legitimately can be left up to the
states, and others are fundamentally local matters. Most of the
fundamental rights I have discussed previously are rights to be shared
equally by everyone in the nation. Public goods and services that need to
be equally available to everyone in the nation should be supported by
federal taxes and administered by the federal government. The states
should not be forced to pay for national public goods and services through
mandates from the federal level.
However, individual states and cities might choose to provide some
higher level of public service than is to be guaranteed to all, and those
supplements, likewise, should be supported by state and local taxes.
Many collective purchase decisions are made at the state and local levels,
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spend it to ensure the integrity of our capitalistic economy. And we are
not wasting money when we decide to buy things collectively rather than
individually. Instead we are helping to build a fairer, kinder, stronger,
and all around better human society.
If current government spending were limited to providing only
legitimate public goods and services, including logical collective
purchases, our government would quite likely be far smaller than it is
today. Most of the tax money that passes through government today
represents indirect transfers of money from those who lack political or
economic power, mainly the working middleclass, to those who have far
more political and economic power, primarily corporate executives and
investors, and a few wealthy individuals. Big government does not
necessarily mean good government, even to those of us who believe in
government.
The future of humanity depends on our willingness and ability to
work together for the common good. Absolutely nothing can prevent us
from restoring the integrity of our government, if we choose to do so.
Nothing can keep us from accepting our responsibility to reshape and
reform government to reflect a national consensus as to how we want to
be governed, if we choose to do so. Nothing is preventing us from
reforming our government so that it functions for the common good, if we
chose to do so. Nothing is preventing us from building a better future for
humanity in which people work together, through government, for their
common good. We need only find the wisdom to use our common sense
and the courage to support and defend what we know to be right and
good.
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