Which Presidents Are Right about Government, George Washington and Thomas Jefferson or Woodrow Wilson and Barack Obama?

When I was became interested in public policy, I thought Jimmy Carter was the epitome of a bad President. But as I began to learn economics, I realized that Richard Nixon and Lyndon Johnson also were terrible and belong in the Hall of Fame of bad Presidents.

And the more I studied economics and public policy, I learned that Herbert Hoover and Franklin Roosevelt were two peas in a failed big-government pod and deserve membership in that Hall of Fame.

Or I guess we should call it a Hall of Shame (you can click on the image to see my selections).

Whatever we call it, I’m now at the point where I realize that Woodrow Wilson and Teddy Roosevelt are the charter members. Why? Well, because they were the first Presidents to reflect the progressive ideology.

More specifically, they shared the ideology of the progressive movement, which saw a powerful and activist central government as a force for good – a radical departure from the views of America’s Founding Fathers, who hoped that the Constitution would protect people by keeping government very small.

Not surprisingly, Barack Obama is in that “progressive” tradition, even to the point of attacking the views of the Founding Fathers in a recent speech at Ohio State University.

I commented on this issue in this Fox News segment.

That short clip only scratches the surface.

For more detail, here are some excerpts from a column by Andrew Napolitano. Like me, he isn’t impressed by the President’s statolatry.

It should come as no surprise that President Obama told Ohio State students at graduation ceremonies last week that they should not question authority… And he blasted those who incessantly warn of government tyranny. Yet, mistrust of government is as old as America itself. America was born out of mistrust of government. …Thomas Jefferson…warned that it is the nature of government over time to increase and of liberty to decrease. And that’s why we should not trust government. In the same era, James Madison himself agreed when he wrote, “All men having power should be distrusted to a certain degree.” …The reason Obama likes government and the reason it is “a dangerous fire,” as George Washington warned, and the reason I have been warning against government tyranny in my public work is all the same: The government rejects the natural law because it is an obstacle to its control over us. …Because the tyranny of the majority can be as dangerous to freedom as the tyranny of a madman, all use of governmental power should be challenged and questioned. Government is essentially the negation of liberty.

Napolitano also warns against majoritarianism in his column, which is music to my ears.

Though I’m not sure our battle today is with majoritarianism or the progressive ideology.

Our real challenge is redistributionism. Far too many people think it is okay to use the coercive power of government to obtain unearned benefits. And that’s true whether the benefits are food stamps or bailouts.

And as we travel farther and farther down this path, it leads to ever-greater levels of dependency and ever-higher levels of taxation. But that simply means more people decide it makes more sense to ride in the wagon rather than pull the wagon.

Somehow, we have to reverse this downward spiral.

Unless we want America to become Greece or France, at which point productive people may be forced to emigrate – assuming there are still some sensible nations left in the world.

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The Strangest Tax Loophole Award

I have a love-hate relationship with tax loopholes.

I’m a big fan of the flat tax, in part because I hate when powerful interest groups use their insider connections to get special treatment. This corrupt process helps explain why the tax code is now a 74,000-page monstrosity.

I want to get rid of all preferences, deductions, credits, deductions, exclusions, and shelters, including one that benefit me such as the home mortgage interest deduction, the charitable contributions deduction, and the state and local tax deduction.

On the other hand, I favor just about anything that lets people keep more of their money. Loopholes are escape hatches that people can use to protect themselves from the grasping claws of the IRS.

The bottom line is that we should only get rid of loopholes if every penny of potential new revenue is used to finance lower tax rates.*

Now that we’ve covered some basics, let’s stop being serious and boring and look at what has to be the strangest tax loophole in the United States.

And it wasn’t even concocted by the crowd in Washington. The award for strangest tax loophole goes to the politicians of Nevada, who decided at some point not to apply the sales tax to prostitution.

Here are some of the details from the New York Daily News.

The tax man may soon be visiting a few Nevada brothels. …Assembly Speaker Marilyn Kirkpatrick (D-North Las Vegas) says the bill would target events and businesses that have either been deemed exempt from state sales taxes or have simply been overlooked. Those operations include brothels, which Nevada lawmakers have been hesitant to tax out of fear that doing so would further legitimize the stigmatized, but legal trade. …George Flint, the director of the Nevada Brothel Association, fears that so-called houses of ill repute could not handle an 8% tax on money spent at brothels, and has proposed a $5 entrance fee instead.

As a libertarian, I suppose I should be impressed. Not only is this “victimless crime” legal, but it isn’t taxed!

But as an observer of politics, I’m completely perplexed. Normally, politicians love to impose “sin taxes” on behaviors that are seen as unseemly. It’s sort of a win-win situation for them. They get to collect more revenue while telling us that it’s for our own good.

This helps explain why there are high taxes on things such as booze, cigarettes, energy, and fast food.

So why have Nevada politicians overlooked (at least up to now) the chance to tax prostitution?

I suppose I could make a joke that they didn’t want to tax the things that they consume, but I’m being serious.

Are the lobbyists for brothels super effective? Well, they probably do have the best holiday parties, but is that why prostitution isn’t taxed?

Beats me. Sounds like a good opportunity for public policy research.

*Another concern is that many politicians don’t understand the difference between a tax loophole such as ethanol and a tax penalty such as double taxation, so their version of tax reform could make bad policies even worse.

P.S. Since this post is about taxes and prostitution, I can’t resist sharing this bit of humor.

P.P.S. Speaking of prostitution, did you know that British taxpayers finance sex trips to Amsterdam?

P.P.P.S. You won’t be surprised to learn that climate-change ideologues claim that global warming causes prostitution.

P.P.P.P.S. You also won’t be surprised to learn that the Germans have figured out very creative ways of taxing prostitution.

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