Andrew Colclough

The Vision Behind Oregon's Measure 66 : UPDATED

First of all - to whoever reads this, I could care less which way you decide to vote on these measures. I think that assumptions of ill intent by anyone on either side of Measures 66 and 67 are foolish, and distract people from carefully weighing the issues logically. 

As anyone who knows me might have guessed - I'm not exactly enthralled with the two ballot measures, 66 and 67, which are currently facing Oregon's voters. I have been trying to think them over for a while now, but I tend to think most clearly when I force myself to write my thoughts. Of course - before you read any further - you should read the actual bills yourself. Here is Measure 66, and here is Measure 67.

At this point, you have probably heard the talking point arguments from either side of the issue. Namely, that your choice is between hurting schools, teachers, and students (by voting against 66 and 67) or hurting corporations, jobs, and the rich (passing 66 and 67). Both arguments may be true, but I think there are some deeper concepts to consider.

"The most basic question is not what is best, but who shall decide what is best."

 -Thomas Sowell

In my opinion, all political and legislative ideas should be judged by two key factors.

1. The vision they are built on
2. Their practical seen and unseen results

In this post - I am going to discuss the vision behind Measure 66. It is important to understand that by 'vision,' I do not mean the stated goals or intent of the policies. In fact - whatever the stated goal of policy happens to be, is almost entirely irrelevant to whether or not it is a good policy which would achieve that goal. When I say 'vision,' I am referring to the actual fundamental assumptions about society, law, and justice that the policy is built on.

Measure 66

Measure 66 raises taxes on a certain group of people who earn above a specified amount of income. In my view, there are several problems with the vision behind this bill, primarily, the vision of Law. Firstly, this tax is progressive in nature, as it singles out a specific group of people to be taxed at a higher rate than another group. From the way I view law, I believe progressive taxes are unjust.

The Law (including tax law) is meant to be an instrument of justice. Here the definition of "just" is especially helpful: 

"Equitable: fair to all parties as dictated by reason and conscience; "equitable treatment of all citizens."

A just Law then is the application of force against the inequitable treatment of citizens, or the violation of individual natural rights, such as life, liberty, or in this case, property. Friederic Bastiat wrote far more eloquently about this concept in the 1800s (Please excuse the long quote):

What, then, is law? It is the collective organization of the individual right to lawful defense.

Each of us has a natural right — from God — to defend his person, his liberty, and his property. These are the three basic requirements of life, and the preservation of any one of them is completely dependent upon the preservation of the other two. For what are our faculties but the extension of our individuality? And what is property but an extension of our faculties? If every person has the right to defend even by force — his person, his liberty, and his property, then it follows that a group of men have the right to organize and support a common force to protect these rights constantly. Thus the principle of collective right — its reason for existing, its lawfulness — is based on individual right. And the common force that protects this collective right cannot logically have any other purpose or any other mission than that for which it acts as a substitute. Thus, since an individual cannot lawfully use force against the person, liberty, or property of another individual, then the common force — for the same reason — cannot lawfully be used to destroy the person, liberty, or property of individuals or groups.

Such a perversion of force would be, in both cases, contrary to our premise. Force has been given to us to defend our own individual rights. Who will dare to say that force has been given to us to destroy the equal rights of our brothers? Since no individual acting separately can lawfully use force to destroy the rights of others, does it not logically follow that the same principle also applies to the common force that is nothing more than the organized combination of the individual forces?

If this is true, then nothing can be more evident than this: The law is the organization of the natural right of lawful defense. It is the substitution of a common force for individual forces. And this common force is to do only what the individual forces have a natural and lawful right to do: to protect persons, liberties, and properties; to maintain the right of each, and to cause justice to reign over us all.

- Frederick Bastiat, The Law

I can think of many rationalizations for a certain group of people to be forced to turn over a greater percentage of their earnings to the State, but not one which is just. Some people argue that the wealthy actually live on a different percentage of their income, than say, a poorer middle-class person, and are less affected by higher taxes. Whether or not this is factually accurate, it hardly justifies the majority deciding what percentage they actually need to live on, or what shall be taken.

"The smallest minority on earth is the individual. Those who deny individual rights cannot claim to be defenders of minorities."  

-Ayn Rand

Essentially, Measure 66 and all progressive taxes, agree that it is right for third parties (lawmakers or the majority of voters) to determine for other individuals (first parties) what constitutes 'enough' income to be taxed at a higher rate. Of course I believe in representative government, but only one which represents the whole equally as individuals, and not one group of citizens vs. another based on class criteria.

Furthermore, I cannot think of a real justification for choosing $250,000, other than the assumption that this amount of money is high enough that a) the taxed party doesn't need the money, or can 'afford it', and b) it won't effect the majority of people voting to pass the Measure. The first reason subtly agrees that a progressive tax is unjust - but then attempts to rationalize it. And the second is nothing more than shrewd politicking.

The unfortunate consequences of Measure 66 passing or failing are real, and shouldn't be minimized. (SEE UPDATE BELOW) If it passes - I believe that it will have an unseen negative effect on jobs (which are already in terrible shape) throughout the state. But there is no doubt - if it fails, it will certainly have a seen negative effect on teachers and schools. As with most government policy - we are left to vote on a loose-loose measure. If anything - this illustrates another simple truth about life:

"There are no solutions; there are only trade-offs."

-Thomas Sowell

As I mentioned in the beginning - in no way could I judge anyone for voting one way or the other on this measure.  The trade-offs of Measure 66 (as well as 67) are difficult to judge, but neither are without negative consequences. I can only state my own judgment and reasoning. Personally, I think 66 represents a deeply flawed vision of society and law. I am not arguing that people who vote for 66 are necessarily approving of this vision. However, I believe that American society should be 'progressing,' or moving away from laws which divide citizens by class and set up one group against another. I think Bastiat again rightly illuminates this issue:

"But, unfortunately, law by no means confines itself to its proper functions. And when it has exceeded its proper functions, it has not done so merely in some inconsequential and debatable matters. The law has gone further than this; it has acted in direct opposition to its own purpose. The law has been used to destroy its own objective: It has been applied to annihilating the justice that it was supposed to maintain; to limiting and destroying rights which its real purpose was to respect. The law has placed the collective force at the disposal of the unscrupulous who wish, without risk, to exploit the person, liberty, and property of others. It has converted plunder into a right, in order to protect plunder. And it has converted lawful defense into a crime, in order to punish lawful defense."

- Frederick Bastiat, The Law

I realize that this opinion may seem grandiose and/or ideological. But I simply believe that the greater trade-off in the long-run is not just "education vs. jobs", but a free people, and a system of just laws. When our laws become instruments of injustice, they undermine their very purpose. And I think it is a serious problem that we have lawmakers who write policy of this nature. 

UPDATE

I came across this article which attempts to fact check the arguments made on both sides of these issues. I was relieved to find that my particular line of reasoning still stands. I think the facts on the practical implications (something I didn't venture into above) are important though, so you should read that article also.

40.91% of the cost of Thanksgiving dinner -> Taxes

When you see these signs - do you get the joke? (Hint: Seen vs. Unseen)

Part of me laughs, and part of me cringes whenever I see these signs....because they are absolute rubbish. This sign is based on the assumption that we the public are either too lazy, or just too ignorant to think beyond what we immediatly see.

Whenever we are presented with this concept: that the government can "put people to work," the question must be asked, "How?" 

When a non-state entity creates a job, it does so either by taking out a loan on the investment bet that the job created will produce enough value to repay or exceed the loan taken, or by reinvesting its own existing capital with a similar goal.

The State "creates jobs" or "puts people back to work" either with existing tax revenues, or by taking on debt to be funded through future tax revenues. I used quotes above because anyone with a grasp of elementary mathematics would realize that this is neither "creating jobs" nor "putting people back to work." It is nothing more than shifting work around.

Ask yourself, what would the tax revenues taken by the state to 'put Oregon back to work' have been used for otherwise? What of the things the tax-payers would have invested their money in, had it not been taxed away?

The answer is: jobs.

Perhaps the tax-payer was planning on buying some new shoes (a shoe salesman's paycheck), going out for an extra nice dinner (a restaurant worker's wages and tip), a kitchen remodel project (construction material producers, contractors, cabinet makers, plumbers, etc) planning to add to their payroll at work to hire a new employee, or even donating money to their favorite charity. But these things will never be seen because some politician had the nice, though deceptive and false idea that they had the ability to "put Oregonians back to work."

It is important at this point to understand that money is nothing more than a representation of labor, or work. We choose to work and earn money because money allows us to trade the value of something we are good at (in my case, web developement), for something we value that we aren't good at, or couldn't possibly create on our own (e.g. a ticket to football game. I neither play football, nor do I have the knowlege or ability to coach a team, let alone build a football stadium. Heck, I even suck at Madden...).

The point is that the sign above is clearly hogwash. It is based on the flawed notion that governments create things. To accept this idea, is to throw out the economic concept of opportunity cost. Government is force. The government is the only entity that we allow the power to involuntarily take our money and re-appropriate it. In this case - it is the opportunity for the tax dollars to have been spent elsewhere - that the government is forgoing so they can be assigned to this road project. If the sign was actually honest it would read: Taking a portion of your work, and directing it to someone or something else. Or perhaps simply, Making Oregonians pay for this road project.  

But telling the truth doesn't matter to politicians because when there is a problem (such as a down economy) they must be seen as doing something to fix the problem. The perception that they are doing something to 'put Oregon back to work' is far more important politically than the actual truth, that they just moved work to a project that the voters will see. What the voters won't see is all of the jobs that were sacrificed to make that particular road project possible.

It is important for me to mention that here, I am not necessarily arguing against road or other government projects. I am however calling out the hack politicians who think that tax-payers are dumb enough to fall for the ludicrous idea that government can create jobs by simply spending them into existence. From here, you can draw your own conclusion on whether the 'stimulus' bill will actually stimulate anything, other than some politician's delusion of grandure.

Oh, and here's the real irony of ironies: This sign is on a road leading up to the city Amtrak station. Amtrak is in business today, and its employees have jobs, only because they are subsidized with money taken from tax-payers. I suppose a sign for that could have read: Putting Amtrak back to work - which of course actually means, Forcing you to pay for Amtrak, rather than whatever else you valued more. 

"In the department of economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause - it is seen. The others unfold in succession - they are not seen: it is well for us, if they are foreseen. Between a good and a bad economist this constitutes the whole difference - the one takes account of the visible effect; the other takes account both of the effects which are seen, and also of those which it is necessary to foresee. Now this difference is enormous, for it almost always happens that when the immediate consequence is favourable, the ultimate consequences are fatal, and the converse. Hence it follows that the bad economist pursues a small present good, which will be followed by a great evil to come, while the true economist pursues a great good to come, - at the risk of a small present evil."

-That Which is Seen, and That Which is Not Seen -Frédéric Bastiat, 1850