Skin in the game

In the early years of the United States, the only people who were allowed to vote were white, male property owners. Today, this notion seems absurd for obvious reasons. “White” because people of any race or ethnicity ought to have the right to vote. “Male” because women do just as much for this nation as men do and also ought to be allowed to vote. The criterion I will choose to focus on is the last: property owners. On its face, the idea seems classist and generally absurd. What about employed people who live in apartments but are nonetheless productive members of society? What about college students? Or seniors who live in retirement homes?

Getting rid of this requirement was clearly a good idea, but I can’t help but think it may have had at least some merit. In the journal “Colonial Williamsburg,” a history magazine about its namesake community, contributor Ed Crews writes that the property requirements varied by state and that the requirements “reflected the belief that freeholders, as property owners were called, had a legitimate interest in a community’s success and well-being, paid taxes and deserved a voice in public affairs.” Though the notion of “freeholders” as the only federal tax payers was not entirely true (due to federal excise taxes on many goods), it spoke to the legitimate fear that America’s fledgling republic might devolve into mob rule by people with little or no financial stake in government policy. It points to something that we as a nation really need to start thinking about.

In the United States, about 47 percent of the population pays no federal income tax. Factoring in people who don’t really have income or who receive substantial tax credits, the percentage is smaller but still significant. These people pay federal payroll taxes, but since those “taxes” actually go to programs like Medicare and Social Security (the latter of which is like a retirement account or union pension, but with crappy returns), it would be more accurate to think of federal payroll taxes as a forced and inefficient investment for low-income individuals. For middle and high-income earners, it’s more akin to just throwing your money out the window, taking “spread the wealth around” to a whole new level. Payroll taxes were 40 percent of federal tax revenue in 2010 and disproportionately (if not only) benefitted those who also don’t pay into the 51 percent of revenue that is combined individual and corporate income taxes. Excise made for 3 percent and “other” (duties, estate, etc.) accounted for 6 percent, according to Tax Policy Center.

Author James Bovard once wrote, “Democracy must be something more than two wolves and a sheep voting on what to have for dinner.” Say a U.S. presidential candidate either promises new entitlement programs for significant portions of the electorate or promises to ramp up funding for current unsustainable ones through taxation. If I were a voter who pays almost nothing to the federal government save for payroll investments and the occasional bottle of beer, I would be strongly tempted by this offer. At face value, I have nothing to lose. If the programs turn out to be a good use of taxpayer dollars, then I get benefits put predominantly on the shoulders of corporations and those who actually pay income taxes. If the programs turn out to be country-indebting and woefully inefficient compared to private counterparts, then I lose virtually nothing. I wait another four years and hope the next one will lead to change I can believe in or something equally trite.

The scenario I have described is the natural and predictable result of allowing our government to assume roles far beyond its intended purpose of protecting the rights and liberties of its citizens. When the concept of rational self-interest is held secondary to the short-sighted desires of a mob, the results are bad enough. Add in the fact that said mob takes on almost no financial risk, and you have yourself a fiscal disaster. The solution, then, is to leave healthcare and retirement to the only system of economics that ensures everyone has a fair financial stake: the free market. If you truly want healthcare, pay for it with your own money. If you want to invest in your own retirement, invest your hard-earned cash. Just remember one thing: You are not entitled to the property (including money earned in a free market) of another human being. You never were, and never will be.

If this sounds harsh to you, feel free to donate your money to those who have healthcare or retirement needs. After all, our beliefs mean nothing if we don’t have skin in the game.

Michael Cook is a Pratt senior. His column runs every other Monday.