Life, Liberty, and the Pursuit of Happiness, Version 4.0

Our current United States tax structure values slavery more than work. Let me unpack this statement a bit. We tax capital gains at 15% while we tax income on wage labor at 28% to 35%, about twice the rate. This means people will have a higher incentive to earn income through capital gains on investments than to work for a living. However, capital gains on investments are generated by someone else’s work, so one who invests in stocks or bonds is earning an income on someone else’s labor. This can be viewed as a variation on the concept of slavery.

From a moral standpoint, one is more entitled to the fruits of ones own labor than to the fruits of the labor of another. Hold on! you might say. Your capital is providing jobs for other people who voluntarily entered into the wage arrangements that will generate the wealth for the investor. I will not argue against the value of capital investments and the concept of capitalism in general. In fact, I am a supporter. My concern is with who controls capital and for what reasons. I will maintain that a system of taxation that encourages the exploitation of the labor of another more than individual work is morally suspect. I would much rather see people encouraged to invest capital in their own businesses. Current tax laws discourage that.

From a practical standpoint, this tax system encourages the demise of the American middle class, for the capital accumulated in investment funds is generally invested in production facilities in other countries and distribution through chain stores in the United States that pay less for labor. Ironically, the American middle class—both Democrat and Republican—have created this system and fueled it with tax exempt and tax-deferred pension funds.

Democrats often complain about the 1% and Wall Street corruption and corporate welfare that this system generates, but Democrats are as heavily invested in pension funds driving this system as are Republicans. The psychology driving this system is less than noble. It basically boils down to the concept that “I want to earn money and retire on profits generated by someone else.”

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The Federalist Papers: The Best Argument for the Constitution

Today I was sent an article by a friend asking for my response. It is titled “The Birth of the Administrative State:  Where It Came From and What It  Means for Limited Government” written by Ronald J. Pestritto, Associate Professor at Hillsdale College. It shows how understanding the Federalist Papers can lay bare many common errors and misconceptions about government in our culture and political parties today. I encourage you to read this article, and you will find my response to my friend Alan below.

Dear Alan,

This is an excellent article. It makes many of the main points that I have been making on this blog, and sheds light on the actions of some particular individuals like Woodrow Wilson, Dewey, and Goodnow who, like Obama, were academics sheltered in the cocoon of their ivory towers and failed to display any real understanding of human nature, incentive, and the production of goods. I think this sentence pointed out the main mistake of the progressives: Continue reading →

The Supreme Court, like every other branch of government, has become the playground of special interests. These interests are reflected in their decisions, and in their departure from the Constitutional principles is evident in their arguments as well. The discussion below is intended to help people think about the role of the Supreme Court in a principled way, rather than as a group to which they can appeal to achieve personal benefits or impose moral views on others through their decisions.

The Purpose of Government is the Happiness of the People

James Madison

When the U.S. Founders established the Constitution, their goal was to establish the best system for all people to pursue happiness. In Federalist 62, Madison stated:

A good government implies two things: first, fidelity to the object of government, which is the happiness of the people; secondly, a knowledge of the means by which that object can be best attained. Some governments are deficient in both these qualities. Most governments are deficient in the first. I scruple not to assert that in the American governments, too little attention has been paid to the last. The federal constitution avoids this error; and what merits particular notice, it provides for the last in what increases the security for the first.

The Declaration of Independence is the Mission Statement of the United States. The Constitution is the legal structure designed to achieve it, and the Federalist Papers are the best explanation of the principles behind it.

The recent Supreme Court decisions on Arizona’s enforcement of illegal immigration and “The Affordable Health Care Act” show little knowledge of the means by which that object can best be attained because they retained a more myopic focus on justifying positions based on legal precedent and popular culture rather than the principles of sound governance that concerned the Founders.

The Supreme Court Reflects Political Factions

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An image based on fear not science

Rio+20

June 20-22, 2012 will be the dates for a big conference on the environment called Rio+20. It will be held in Rio de Janiero. Before then, and during the event, we will hear many arguments about climate change and why we need a green economy. The climate is always changing, and I believe in the value of science, living sustainably, and thinking “green.” However, I have yet to be convinced that what the United Nations has told us is based on good science or that UN agencies really have the ability to “care” for the environment and, if they did have the ability, they would be the right authority to enact taxes because of conflicts of interest. And, further I have come to be suspicious of the motives of any government or corporate official that uses the logic of fear to garner support that will increase his or her wealth or power.

The Cause and Solution to Sea-Level Rise

Unscientific linear logic

As a case in point, lets look at the issue of sea level rise. In the climate change debate there is much discussion of the rise of oceans as a result of glacial melt. Glacial melt, the argument goes, is a result of global warming; and global temperature rise is caused by the human activity that causes greenhouse gases; and greenhouse gases are created by carbon emissions, such as from burning  fossil fuels.The solution, it is argued, is to have a global authority tax the use of carbon fuels and take the money to create sustainable environment programs. Continue reading →