The Greed of Predators Knows No Bounds

The Greed of Predators Knows No Bounds
by Mark Luedtke

Oliver Wendell Holmes Jr. famously asserted, “Taxes are the price we pay for civilization.” Hogwash. As Frank Chodorov explained, all taxes are robbery. “All history points to the economic purpose of political power. It is the effective instrument of exploitative practices. Generally speaking, the evolution of political exploitation follows a fixed pattern: hit-and-run robbery, regular tribute, slavery, rent-collections. In the final stage, and after long experience, rent-collections become the prime proceeds of exploitation and the political power necessary thereto is supported by levies on production.” There’s nothing civilized about institutionalized robbery. Government is the world’s most successful protection racket. We pay tribute to our rulers to keep their brigands from assaulting us and seizing our property through violence.

Chodorov explains why we tolerate this robbery, “Centuries of accommodation have inured us to the business. Custom and law have given it an aura of rectitude; the public appropriation of private property by way of taxation and the private appropriation of public property by way of rent collections be­come unquestioned institutions. They are of our mores.” Justice Holmes’s statement was political propaganda designed to reinforce our mistaken perception of taxes.

Carrying on this predatory tradition, Maryland Governor Martin O’Malley wants to charge sales tax on digital downloads and internet retail sales. The governor appeals to “fairness” to make his case. Since brick and mortar businesses collect sales tax, internet companies should as well. It’s ironic that fairness is regularly used to justify increased predatory looting of the people. If the governor really wanted fairness, he would abolish the sales tax. That would level the playing field for businesses and would be a step toward leveling the playing field between Maryland’s rulers and the people they prey upon.

O’Malley also proposes to raise taxes on gasoline, tobacco, nursing homes, water and sewers. But raising taxes is bad policy even for the predators at the state level. People can still move freely from state to state in the US, and people tend to flee high tax states and move to low tax states, taking their wealth with them. Business owners take their businesses and the jobs they create with them. Since taxes chase people and their wealth out of high tax states, in the long run these new taxes will lead to reduced revenues for Maryland’s government.

The Wall Street Journal reports that Governor O’Malley already experienced this after adding a surtax on millionaires, “One immediate impact of the millionaire tax was that the yacht owners who were supposed to pay this higher rate suddenly went missing. The number of $1 million tax filers shrank to 4,151 in 2009 from 6,899 in 2007, meaning four of 10 seven-figure earners vanished from the rolls. In 2010 the millionaire pool partially recovered to 5,282, but that was still 23% below the number before the tax was enacted. A big part of the decline was a result of the recession, but some of the missing millionaires left the state and stopped filing Maryland returns. According to the Baltimore Sun, thanks to years of exodus there are now ‘135,000 Marylanders, rich and otherwise’ living in Florida alone. Florida has no income or estate tax, while Maryland has one of the nation's highest estate taxes.”

This isn’t rocket science. People act in their own interests. They want to keep more of their money, so they flee high tax states. That’s human nature. But politicians are human to, and they act to advance their own interests just like everybody else. Governor O’Malley knows increasing taxes will hurt the people in his state. He just doesn’t care. His primary concern is filling his campaign coffers and getting re-elected so he can send his kids to better private schools or buy a second house. In Florida. He believes that pushing these new taxes will benefit him personally.

The same is true for Ohio politicians. Most don’t care that the high state income tax and Dayton city income tax depress our state and our city. Supporting those taxes benefits them personally.


But the freedom to move is a powerful force. It’s the force that drives federalism. In numerous states, politicians are looking to abolish income taxes because they believe doing so will get them re-elected. According to the Wall Street Journal, state governments in Oklahoma, Kansas, Missouri, Nebraska, South Carolina, Idaho, Maine, New Jersey, Indiana and Ohio are all considering lowering or abolishing their state income tax. People are voting with their feet, and those left behind are beginning to instigate positive change to improve their own lives and make their states more competitive and attractive to producers. Too bad for the people of Maryland that O’Malley is going the wrong way.

Federalism empowers the people to resist state government oppression. That’s one reason our rulers in Washington are trying to stamp it out by seizing as much power from the states as possible. And the US government doesn’t allow Americans to freely leave the US to move to less oppressive countries. It seizes the property of expatriates through an expatriation tax to keep Americans from fleeing its oppression.