STAFF NEWS & ANALYSIS
Don’t be Fooled by Elizabeth Warren’s Argument for Taxation
By Daily Bell Staff - May 31, 2016

Elizabeth Warren Is Good at Her Job … Elizabeth Warren has a rare talent for distilling political messages. In 2011, as she was running for the Senate seat that she won the next year, the former Harvard law professor delivered the kind of concise, pointed rationale for public investment — and the taxation to support it — that the White House had been striving to master for the previous three years.   -Bloomberg

This Bloomberg editorial celebrates Elizabeth Warren’s famous justification of taxes and the federal government.

It tells the story of how the left wing Senator from Massachusetts was filmed in a “crude video” explaining her positions in a supporter’s house. “Her remarks have since been viewed more than a million times.”

She spoke to a made-up individual who had started a successful company but believed his taxes were too high.

“You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for.

Now, look, you built a factory and it turned into something terrific, or a great idea. God bless — keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.

This was such a successful justification for progressive taxation that when he accepted the presidential nomination in 2102, Barack Obama made similar points.

“As colloquial political philosophy goes, Warren’s address made as good a case for the liberal social contract as you’re likely to hear.”

The trouble with Warren’s points is that the anecdote is a fiction not just in terms of its reality but also in terms of its tone and substance.

Her presentation seems to imply that there was some level of discussion about taxes.

There is no discussion.

The IRS is not going to take the time or energy to justify taxation to you and neither is a Senator.

You need to pay what you owe.

So long as you pay, you can ask questions. But if you do, you may end up on a government list identifying “terrorists.”

You could maintain for instance that a contract is something entered into voluntarily but you had no choice in the matter.

You could also point out that the federal government does a terrible job of educating students.

A Frontpage Magazine article pointed out in 2013 that New York City spent some $20,000 educating students that still couldn’t read nor write when they reached college.

Nearly 80 percent of New York City high school graduates need to relearn basic skills before they can enter the City University’s community college system.

Presumably it’s no better today.

Warren mentions the roads that the factory owner uses. But public infrastructure in the US is a mess.

Estimates are that it will take something like $4 trillion to fix the US’s aging infrastructure, including roads, bridges, sewers and water delivery.

Government passes initial programs because they are popular and help politicians gain votes. But ongoing maintenance is often expensive and lacks a political payoff.

For this reason, privately funded infrastructure may be a good deal more practical than public programs. Unfortunately, throughout the West, public infrastructure is the preferred alternative.

The result: Flint Michigan just poisoned its citizens with lead content in drinking water and tried to cover it up.

Public maintenance of any good or service is questionable in the long term. The competitive and customer-oriented incentives simply don’t exist in the public sector.

For instance, Warren makes the case that the factory owner was safe at home and at work because the police were protecting him.

But these days, government officials increasingly see civil policing, along with other publicly funded, armed entities, as providing protection to bureaucratic environments.

The Pentagon and Homeland Security have been busily arming police with the latest military equipment. Last year alone, police killed at least 1,100 citizens according various public sources.

Warren assumes the success of the factory owner, but regulations, taxes and central bank monetary debasement have all take their toll on business startups.

These still occur in the US but according to Reason magazine, entrepreneurial activity has been shrinking in the US since 2008.

While startups occur in urban environments, business in less populated areas has fallen off significantly.

The trouble with Warren’s statement is that it is loaded with assumptions about the relationship between fedgov and its citizens.

It presents a social contract that does not exist.

US fedgov is actively hostile to its citizens. At any one time there are some six million in various stages of incarceration in the US. And those in prisons can be legally treated as slave labor.

USA Today once carried a report that one of every three US citizens had some sort of criminal-oriented interaction with police before the age of 25.

Homeland Security identifies many types of Americans as “terrorists” these days, including those who believe in a constitutional republic.

The country’s many intelligence agencies and domestic spying systems unconstitutionally target citizens without warrants or even reasons.

It is fairly clear that fedgov and the Pentagon are actively anticipating citizen violence over the next few years as the economy continues to unravel.

What is never mentioned is that the entire system has been positioned to fail.

Only failure provides the West’s elite leadership with the justification to rebuild – this time on an international rather than national scale.

This is something to keep in mind when contemplating whether the US or the West itself can return to a more productive and prosperous past. The West’s leaders don’t want to.

Conclusion: Warren’s assumption that a social contract exists between citizens and their governments is faulty. Her argument in this day-and-age is make believe.

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  • Blank Reg

    Here’s another response I found, from back in that day (2011):

    http://www.ncc-1776.org/tle2011/tle638-20110925-03.html

  • Praetor

    Excellent Analysis! I make this comment not about religion, it about corruption and how humans good nature is manipulated!

    The little old lady down the street was walking to the mail box. I was standing there looking through my mail. The usual, ‘good mornings and such’, she says, well I most send my check to catholic charities. I say really, she says yeah, to help those poor people in Africa, their live are so terrible over there. I ask, how long have you been sending money to catholic charities, her response around 30 years or so. Me being me, I said, do you know that the ‘C’ charity has more than likely received close to a trillion dollars or more from good people like you to eliminate hunger and starvation around the world and in Africa, and there are still millions dying from hunger. She said I know, its more for tax purposes, now. Sad!

    Warren and her fellow phonies in congress are no more than a charitable organization. Give us you’re money and we will do good with it., you watch. How many more years will this go on, not many!!

  • Bruce C.

    Although I agree with the DBs’ points on this, I think even “they” are not addressing the fictitious business owner’s issue. According to the DB, the business owner is complaining that “his” taxes are “too high”, not that he necessarily objects to them fundamentally. Warren’s answer evades the question by ranting about his use of them. She doesn’t address whether or not the “price” of those services (infrastructure, police protection, employee education, etc.) are justified, nor does she explain why they should be provided by the government vs privately or by the owner himself, nor why he should have to pay even for those services he doesn’t use.

  • FreeOregon

    In the Age of e-bit money taxes are a barbarous relic from the time when money was commodity based. As with Greenbacks, governments can print. No debt.

    The challenge is how to limit the consequences of human cupidity. Debt based currency failed. Governments never pay, and the interest accumulates as part, now 79%, of the deficit.

    Given human weakness and the corrupting nature of power why not (1) eliminate all taxes; (2) eliminate all career politicians; (3) issue e-bits with supply limited to 3% of GDP; (4) eschew force and threats of violence both domestically and internationally.

    Yes, politicians still will lie, as will the bureaucracy. Why not begin thinking of alternatives? Not reform. Alternatives.

  • Calcinor Jones

    The anti-freedom propaganda that comes from the Harvard think tank is astounding. Look to Detroit, LA and Chicago to obtain cogency WRT the failures of taxation agendas that perpetuate the redistribution nightmare.

  • Dimitri Ledkovsky

    Commissar Warren haranguing the proles. As kids are prone to utter: “She is THE worst!”

  • Goldcoaster

    Never signed no Social Contract, not when it includes illegal aliens. Rule of Law first.

    • MetaCynic

      Isn’t it interesting that leftists are working hard to have us believe that obvious things such as race and gender are social constructs while a thoroughly illogical concept such as a social contract is an addendum to the laws of physics.

  • Libertarian Jerry

    The fact of the matter is that Elizabeth Warren was a tenured dean with Harvard University with a salary of Ten Thousand dollars per week plus benefits. Her and her husband are both politically connected millionaires who I would label Mercedes Marxists. The question to ask is how much wealth and how many jobs did Ms.Warren create? Not only did the factory owner have wealth extorted out of his business but so did all of his employees. The problem is,as the factory owner explains is not paying taxes but paying taxes for services of government that the factory owner does not need or want. In other words Ms. Warren works under the assumption that all wealth belongs to society and if an individual takes more than his “fair share” then that individual is stealing from all of us. This assumption is at the bottom of all socialist dogmas. Its the guilt trip exemplified.

  • Bob

    Maybe I’m wrong, but I thought that roads were payed for by fuel taxes and water and sewer lines were paid for by our utility bills.

    • Ernie Hopkins

      Those are the justifications for the tax, the actual “pay for” aspect typically has to come from elsewhere as those funds vanish into bureaucratic payrolls and pet projects. For instance fuel taxes, the State’s collect and turn these over to the US Treasury. They then petition the Fed to get these back via grants for “approved” road and bridge projects. When selling technology to government school districts, our number one fund provider was Fed DOT. I am sure this is not even remotely what the average citizen thinks his fuel taxes are paying for. First hand experience in multiple communities, water and sewer line replacement is billed to the property owner bordering the bad line. This is in addition to the utility bills. Have you noticed there is never enough money, even though revenue has skyrocketed over the last decades? Daily Bell has tagged this one well as usual.

      • MetaCynic

        You’ve touched on the reason why no matter how much is raked in from taxes, fines and fees there never seems to be enough money for infrastructure and what we are told are vital services only government can provide. Government is in reality a vast patronage machine creating overcompensated jobs in the nature of one person digging a hole and another filling it up. Infrastructure and monopoly services are peripheral activities carried out grudgingly to make government appear to be indispensable.

  • MetaCynic

    I’m sure that the USSR’s nomenklatura labored just as hard getting out their government-is-indispensable message as the equally privileged Warren is laboring to get hers out. The USSR’s government educated masses were told that without collective farming, they would all starve; without government provided housing, they would all be homeless; without government provided healthcare, they would all be sick; without government schools, they would all be illiterate; without government provided jobs, they would all be unemployed; and without government media, they would all be uninformed. What they failed to mention is that without government censorship, the masses would have quickly figured out that the government-is-indispensable narrative was a monstrous lie.

    And so the Soviet people endured decades of near worthless government goods and services believing that these polished turds were really golden apples. It’s too bad for the likes of Warren that we needn’t wait decades to have the veil lifted from our eyes. The internet is discrediting her equally fictitious narrative in real time.

  • marcdepiolenc

    Unfortunately, the article is completely correct about Warren’s fallacious claims. I am equally certain that many will accept them.

  • rahrog

    Warren and her ilk are a plague of bloody locusts. All they do is destroy. They are increasingly surrounded by their own diseased lies. The antics of these people over the last quarter century would be comical if it weren’t for all the innocents The Ruling Class slaughters. Their time is running out. DECLARE YOUR INDEPENDENCE!!! SECEDE!!!

  • RudyInArizona

    I am not fooled by this woman or Sanders, or Clinton or Trump.

  • Ed
  • pcnot

    “A Frontpage Magazine article pointed out in 2013 that New York City spent some $20,000 educating students that still couldn’t read nor write when they reached college.” –who wrote this and where did that person go to school?

    . . .students WHO still could NEITHER read nor write. . . Sheesh

  • tgmolitor

    The current progressive taxation rates must become an “equal-rate” taxation system.

    Naturally the liberal establishment such as Warren stands firmly against equal-rate
    taxation. Their goal is to collectivize America along the lines of
    Fabian socialism. Liberals imagine themselves as being politically
    idealistic and just in their espousal of “progressive tax rates.” But
    this is not true.

    All great thinkers of our past understood that a progressive tax code, i.e., arbitrary rates, is dictatorial, not idealistic and just. They supported uniform rates
    because tax uniformity is the only way to uphold “equal rights” and
    avoid the evolution of class war, factions, and the tyranny of
    centralized government.

    • Bob Podolsky

      A much more detailed and cogent discussion proving the deceptiveness of the “social contract” argument can be found here: https://www.titanians.org/ethics-law-government/ . In summary, proponents of the “social contract” either have no idea what actually constitutes a contract…or they simply lie about the concept to justify plunder by government.

      And rather than justify a tax with “uniform rates”, I would invite the reader to consider the premise that taxation of any kind is, by any rational criteria, a form of slavery. You’ll find 3 arguments to this effect here: https://www.titanians.org/why-taxation-is-slavery/.

      • tgmolitor

        The first step in ending the income tax and the IRS is a proposed 28th Amendment to the U.S. Constitution replacing the progressive tax rates with an “equal-rate” system. Eventually, the goal of abolishing the income tax and the IRS will be achieved if the first step is successful.

        • Kevin Tebedo

          The best way to rid us of IRS and unjust taxation is by returning to the Constitutionally mandated tax categories of direct and indirect taxation. A flat tax is close but not the same. The current income tax is an excise tax and thus by nature of indirect taxation, voluntary.

  • r2bzjudge

    “She spoke to a made-up individual who had started a successful company but believed his taxes were too high.”

    A made up individual for a made up story.

    A real story. 3,000 millionaires have left either Chicago or Illinois, i forget which. 7,000 millionaires have left France. That represents a loss of tax revenue to those areas.

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