The Taxpayer Frog In the IRS Pot

The Taxpayer Frog In the IRS Pot

By Randall Hoven

You know the story. Put a frog in hot water and he'll jump out, but
put him in cooler water and slowly raise the heat and he'll stay in
even as he boils to death. Are we frogs starting to boil in
government stew? In the midst of a Presidential campaign where we
seem to be deciding who's universal health care is more universal and
who's global climate policy is more global, maybe it's time to check
the temperature of the pot we're in.


The nature of the slow boil is that short-term changes are not
detectable. So let's look at a longer term to see just how much
hotter it's become. Let's look at the last century and compare its
beginning with its end and to current time.


Federal spending. In 1900 federal spending was $0.5B. In 2000 it was
$1,789B . Those amounts translated to 2.5% of GDP in 1900 and 21% in
2000. Government spending at all levels in the U.S. was 36.5% of GDP
in 2006. That 2.5% of GDP that could sustain the entire federal
government in 1900 is not even enough to cover the Medicare program
today.


The Medicare program, by the way, did not exist in 1900; it was
established in 1965.


Federal taxes. A federal income tax did not exist in 1900; it was
unconstitutional, and would remain that way until the 16th Amendment
was ratified in 1913. The first 1040 form included one page of
instructions, and appeared to apply to both individuals and
businesses. Today's 1040 instructions for individuals runs 155 pages,
with no guarantee that you won't have to fill out other forms and
consult other instructions.


Federal regulation. There were few enough federal regulations in 1900
that the government did not do anything special to keep track of
them. That changed in the middle of the New Deal. The Federal
Register, the master list of federal regulations, came into existence
in 1936. In that year it had 2,620 pages of regulations. The next
year it had 3,450. In the year 2000, it had 83,294 pages.


Cabinet Departments. There were seven cabinet level departments in
1900: State, Treasury, War, Navy, Justice, Interior and Agriculture.
All but Interior (1849) and Agriculture (1889) were established prior
to 1790.


In 2000 there were 14 cabinet departments, including 9 created after
1900: State, Treasury, Justice, Interior, Agriculture, Commerce
(1903), Labor (1913), Defense (1947), Health & Human Services (1953),
Housing and Urban Development (1965), Transportation (1966), Energy
(1977), Education (1979), and Veterans Affairs (1988).


In 2002 the Department of Homeland Security was established, making
the current total 15 departments. If the "cabinet level" positions
are included (excluding the Vice President), the total is 20. The
cabinet level positions (excluding VP) are White House Chief of Staff,
Office of Management and Budget, U.S. Trade Representative, the
Environmental Protection Agency, and the Office of National Drug
Control Policy.


Constitutional Amendments. The first 10 Amendments (the Bill of
Rights) and the 11th were passed prior to 1800. The 12th was passed
in 1804. In the next 109 years, only three more Amendments were added
to the Constitution; all three were passed in the five years between
1865 and 1870 and related to ending slavery and establishing the
rights of ex-slaves. The last 12 Amendments were all passed between
1913 and 1992. There are now 27 Amendments.


Federal Bureaucracy. The following sampling of government agencies
did not exist in 1900. (The years given are when the agency was
established. When a range is given, it includes the related pre-
cursor agencies.)


FDA, Food and Drug Administration (1906-1930)
FBI, Federal Bureau of Investigation (1908-1935)
Federal Reserve (1913)
IRS, Internal Revenue Service (1913)
FTC, Federal Trade Commission (1914)
BATF, Bureau of Alcohol, Tobacco and Firearms (1920-1972)
FCC, Federal Communications Commission (1934)
SEC, Security and Exchange Commission (1934)
Social Security (1935)
Medicare and Medicaid (1965)
EPA, Environmental Protection Agency (1970)
OSHA, Occupational, Safety and Health Administration (1971)
DEA, Drug Enforcement Administration (1973)
FEMA, Federal Emergency Management Administration (1979)


Crime and Punishment. In 1900 there were no Federal laws against
drugs . None. In fact, you didn't even need a prescription for
medicine. Now, of course, the Federal government outlaws marijuana
even where a state government has made it legal (over the dissent of
Justice Clarence Thomas, by the way), and has the FDA, DEA and other
departments of armed men ready to enforce those laws and regulations.
More generally, the federal departments we normally associate with law
enforcement, the FBI and BATF for examples, did not exist at all in
1900.


In 1900 there were about 100,000 people (1 in 760) in U.S. prisons.
In 2000 there were about 2 million (1 in 140). The incarceration rate
increased over 400%.


In 1900 there were 1.2 murder victims for every 100,000 people. The
rate has been over 10 per 100,000, and in 2000 it was 6.1 per 100,000,
an increase of over 400% compared to 1900.


Generally, the federal government has stepped into law enforcement in
a big way since 1900. Unfortunately, we did not become safer, either
from criminals or from zealous prosecutors and lawmen. More of us get
locked up. More of us get murdered. Four hundred percent more of us.


Property. Owning property used to mean something; it meant you could
do pretty much what you wanted with it and on it. Now it's not even
yours if the government at any level decides it could be put to better
use by someone else (again, over the dissent of Justice Clarence
Thomas). Don't let your kids build a tree house; you need a building
permit for that and no city would ever approve such a thing. I
wouldn't even say I own my house; I rent it from the county for about
$450 per month in property taxes, on a house assessed right around the
U.S. median.


Personal. The above examples might seem too abstract or impersonal.
Even the high overall tax rate (over one third of every dollar) can
seem removed from our personal life either because we never see the
money (due to withholding, which started in World War II) or the tax
is relatively hidden (e.g., gas tax is paid at the pump). Here are
just a few examples of a more personal nature, none of which would
have been conceivable in 1900.


An eighth-grade honor student was strip-searched by school officials
for the suspicion of having Ibuprofen, a common over-the-counter drug
for pain . No Ibuprofen was found on her, by the way. On the other
hand, behavior modifying drugs such as Ritalin can be forced on
students over the objection of parents. The 9th Circuit Court of
Appeals has already ruled that "parents have no due process or privacy
right to override the determinations of public schools."


A one-year-old girl was decapitated by an airbag in a low-speed
parking-lot collision that would have involved little or no injury
were it not for the airbag. The government now mandates airbags in
all cars despite the data showing airbags "kill more children than
they save". The government's answer is to recommend that children be
put in the back seat.


Atlanta police shot and killed a 92-year-old woman after a no-knock
entry to her home, based on an informant saying a large stash of
cocaine would be there. No cocaine was found, although a small amount
of marijuana was. According to Radley Balko of Reason magazine,


"beyond Atlanta, the beat goes on. All across the country, narcotics
units and SWAT teams are still kicking down doors in the middle of the
night and still deploying flash grenades and using aggressive,
paramilitary tactics--and they're still doing all of this to apprehend
people suspected of nonviolent crimes. And they're still making
mistakes."


Assessing the Heat. The last century wasn't all bad, of course. Life
expectancy for men, for example, went from 46 to 74. But even there,
the biggest jump occurred in the first half of that century: from 46
in 1900 to 66 in 1950 -- all before Medicare, Medicaid, OSHA, and the
Department of Health and Human Services. (Personally, I attribute
much of that extra life expectancy to engineers who got clean water to
us and dirty water away from us.)


We also got richer and life got better in other ways. But I would
argue, as in the case of life expectancy, that the improvements came
in spite of government growth, not because of it. Ronald Coase,
winner of the 1991 Nobel Prize in Economics, summarized it quite well
in a 1997 interview with Reason magazine http://www.reason.com/news/show/30115.html.


"the government now operates on such a massive scale that it had
reached the stage of what economists call negative marginal returns.
Anything additional it does, it messes up." [Emphasis added.]


At the beginning of last century, communism was considered so bad by
our liberal and Democratic President Woodrow Wilson and the Democratic
Congress at time that they passed the Espionage and Sedition Acts and
authorized Attorney General A. Mitchell Palmer to conduct the "Palmer
raids" to fight it - the original "Red Scare". I would say that was
equivalent to frogs jumping out of the water because they felt the
heat immediately.


But the heat has been turned up slowly so that today communism is not
even feared. In fact it is taught in our best universities by
communists. By the end of the 20th century, a third of the voting age
population in the U.S. thought the phrase "to each according to his
needs, from each according to his abilities" was in the U.S.
Constitution, and another third were not sure. (The phrase came from
Karl Marx, author of The Communist Manifesto.) The Communist Party
USA openly advocates to "defeat McCain and strengthen Democratic
majorities in Congress" and to elect either Barack Obama or Hillary
Clinton in 2008.


The CPUSA itself says electing more Democrats helps the Communist
cause. And we frogs think it's comfortable in here.
.

Loading