Friday, October 21, 2011
Reply to Jeffrey Sachs
Here was my comment on Jeffrey Sachs's article A New Direction for American Economic Policy ...
Take money from Bill Gates and give it to politicians to spend!? Let's skip the middlemen! Gates and the other 1% should directly allocate their individual taxes among the various government organizations at anytime throughout the year
While we're at it...why not let Sachs put his taxes where his mouth is? If what he's saying has merit...then wouldn't Gates and company follow Sachs's advice if they were given the choice? Heck, why not let all taxpayers directly allocate their taxes?
Forcing taxpayers to consider the opportunity costs of their individual tax allocation decisions is the only way to ensure the best possible use of limited resources. In other words, the invisible hand is always more effective than planners at efficiently allocating resources.
We solved the free-rider problem long ago by forcing people to pay taxes...now we just need to solve the inefficiency problem by allowing taxpayers to choose how to spend their taxes.
Imagine how inefficient the outcome would be if we all had to purchase the same private goods? Yet, everybody thinks it's perfectly natural that we're all forced to purchase the same public goods. The result? Hyperpartisan obstructionism.
Besides, why should people feel a cold prickle when they pay taxes? If we allow them to choose how to spend their taxes then they'll feel a warm glow. It should feel good to contribute to the common good!
Yup, pragmatarianism is the best long term solution to these problems.