Live by the government, die by the government
Businesses must fight government abuse, not exploit it
- Wednesday, December 9, 2009
At the signing of the Declaration of Independence, Benjamin Franklin famously said, "We must all hang together, or assuredly we shall all hang separately."
The same is true today in the fight to preserve limited government and the free-market system. Unfortunately, some business leaders who generally support free enterprise happily accept government intervention when it benefits them - even when everyone else has to pay for it. Selling out their principles, though, only delays the harm they, too, will suffer from the heavy hand of government. When government chooses the winners and losers, everyone loses in the long run.
Consider two prime examples of government-business collusion in Nevada: the recently approved new Las Vegas city hall, and the state legislature's forthcoming tax study.
Last week, the Las Vegas City Council approved a new city hall — a.k.a. Mayor Oscar Goodman's $185 million monument to himself — with little opposition. Under the plan, the private developer Forest City stands to make a boatload off future redevelopment dollars from taxpayers.
Sadly, this type of arrangement is nothing new. As Geoffrey Lawrence, an NPRI fiscal policy analyst, noted in "Rolling the Dice on the Taxpayers' Dime," private businesses routinely receive tens of millions of dollars in subsidies from the Las Vegas Redevelopment Agency.
The problem is that if the government gives, it can also take away. Las Vegas' general fund will be on the hook if — or when — Goodman's shrine starts losing money, and property or sales taxes likely will be raised to address the shortfall. Eventually, the bill will come due for everyone — even the businesses that benefit immediately from this scheme.
Then there's the legislature's tax study, which will be conducted by the firm Moody's Analytics under specific legislative directive to "review proposals for broad-based business taxes which are fair and equitable."
The "Nevada Vision Stakeholders Group" — 19 individuals selected by the Interim Finance Committee to represent various politically powerful special interests — will guide Moody's by setting various goals for how much money Nevada should spend over the next 20 years. Unsurprisingly, the 19 "representatives" of Nevada don't include a broad base of business representatives. Casino executives and a mining lobbyist, though, did make the cut — in a rather obvious effort by the IFC to shield gaming and mining from new taxes in exchange for their support for a new business tax.
Again, in the short term, it may make sense for these sectors to sell their principles for the proverbial 30 pieces of silver. But it won't pay in the long term.
As evidenced by its relentless growth at all levels, government is never satisfied with a single tax increase. After all, if politicians can spend money better than the private sector (as some believe they can), then they'll always feel entitled to more.
The only long-term solution is to stop government from picking winners and losers entirely. As the political philosopher Frederic Bastiat noted more than 100 years ago, this problem, which he calls "legal plunder," will spread quickly if it is not stopped immediately.
But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.
Then abolish this law without delay, for it is not only an evil itself, but also it is a fertile source for further evils because it invites reprisals. If such a law — which may be an isolated case — is not abolished immediately, it will spread, multiply, and develop into a system.
The person who profits from this law will complain bitterly, defending his acquired rights. He will claim that the state is obligated to protect and encourage his particular industry; that this procedure enriches the state because the protected industry is thus able to spend more and to pay higher wages to the poor workingmen.
Do not listen to this sophistry by vested interests. The acceptance of these arguments will build legal plunder into a whole system. In fact, this has already occurred. The present day delusion is an attempt to enrich everyone at the expense of everyone else; to make plunder universal under the pretense of organizing it.
As the Tea Parties have demonstrated, many citizens already understand that everyone can't get rich off everyone else, and that we must hang together in the fight against excessive government.
What must happen next is for wayward businesses to realize that this principle is the key to their long-term profits — even if it means turning down opportunities for short-term gain.
Victor Joecks is the deputy communications director at the Nevada Policy Research Institute.