Conscience of a Conservative (7 page)

Here is an indication of how taxation currently infringes on our freedom. A family man earning $4,500 a year works, on the average, twenty-two days a month. Taxes, visible and invisible, take approximately 32% of his earnings. This means that one-third, or seven whole days, of his monthly labor goes for taxes. The average American is therefore working one-third of the time for government: a third of what he produces is not available for his own use but is confiscated and used by others who have not earned it. Let us note that by this measure the United States is already one-third "socialized." The late Senator Taft made the point often. "You can socialize," he said "just as well by a steady increase in the burden of taxation beyond the 30% we have already reached as you can by government seizure. The very imposition of heavy taxes is a limit on a man's freedom."

But having said that each man has an inalienable right to his property, it also must be said that every citizen has an obligation to contribute his fair share to the legitimate functions of government. Government, in other words, has
some
claim on our wealth, and the problem is to define that claim in a way that gives due consideration to the property rights of the individual.

The size of the government's rightful claim—that is, the total amount it may take in taxes—will be determined by how we define the "legitimate functions of government." With regard to the federal government, the
Constitution
is the proper standard of legitimacy: its "legitimate" powers, as we have seen are those the Constitution has delegated to it. Therefore, if we adhere to the Constitution, the federal government's total tax bill will be the cost of exercising such of its
delegated
powers as our representatives deem necessary in the national interest. But conversely, when the federal government enacts programs that are
not
authorized by its delegated powers, the taxes needed to pay for such programs
exceed
the government's rightful claim on our wealth.

The distribution of the government's claim is the next part of the definition. What is a "fair share?" I believe that the requirements of justice here are perfectly clear:
government has a right to claim an equal percentage of each man's wealth, and no more.
Property taxes are typically levied on this basis. Excise and sales taxes are based on the same principle—though the tax is levied on a transaction rather than on property.
The principle is equally valid with regard to incomes, inheritances and gifts.
The idea that a man who makes $100,000 a year should be forced to contribute ninety per cent of his income to the cost of government, while the man who makes $10,000 is made to pay twenty per cent is repugnant to my notions of justice. I do not believe in punishing success. To put it more broadly, I believe it is contrary to the natural right to property to which we have just alluded—and is therefore immoral—to deny to the man whose labor has produced more abundant fruit than that of his neighbor the opportunity of enjoying the abundance he has created. As for the claim that the government
needs
the graduated tax for revenue purposes, the facts are to the contrary. The total revenue collected from income taxes beyond the twenty per cent level amounts to less than $5 billion—less than the federal government now spends on the one item of agriculture.

The graduated tax is a
confiscatory
tax. Its effect, and to a large extent its aim, is to bring down all men to a common level. Many of the leading proponents of the graduated tax frankly admit that their purpose is to redistribute the nation's wealth. Their aim is an egalitarian society—an objective that does violence both to the charter of the Republic and the laws of Nature. We are all equal in the eyes of God but we are equal
in no other respect.
Artificial devices for enforcing equality among unequal men must be rejected if we would restore that charter and honor those laws.

One problem with regard to taxes, then, is to enforce justice—to abolish the graduated features of our tax laws; and the sooner we get at the job, the better.

The other, and the one that has the greatest impact on our daily lives, is to reduce the volume of taxes. And this takes us to the question of government spending. While there is something to be said for the proposition that spending will never be reduced so long as there is money in the federal treasury, I believe that, as a practical matter, spending cuts must come before tax cuts. If we reduce taxes before firm, principled decisions are made about expenditures, we will court deficit spending and the inflationary effects that invariably follow.

It is in the area of spending that the Republican Party's performance, in its seven years of power, has been most disappointing.

In the Summer of 1952, shortly after the Republican Convention, the two men who had battled for the Presidential nomination met at Morningside Heights, New York, to discuss the problem of taxes and spending. After the conference, Senator Taft announced: "General Eisenhower emphatically agrees with me in the proposal to reduce drastically overall expenses. Our goal is about $70 billion in fiscal 1954 (President Truman had proposed $81 billion) and $60 billion in fiscal 1955... Of course, I hope we may do better than that and that the reduction can steadily continue." Thereafter, the idea of a $60 billion budget in 1955, plus the promise of further reductions later on, became an integral part of the Republican campaign.

Now it would be bad enough if we had simply failed to redeem our promise to reduce spending; the fact, however, is that federal spending has greatly
increased
during the Republican years. Instead of a $60 billion budget, we are confronted, in fiscal 1961, with a budget of approximately $80 billion. If we add to the formal budget figure disbursements from the so-called trust funds for Social Security and the Federal Highway Program—as we must if we are to obtain a realistic picture of federal expenditures—total federal spending will be in the neighborhood of
$95 billion.

We are often told that increased federal spending is simply a reflection of the increased cost of national defense. This is untrue. In the last ten years purely
domestic
expenditures have increased from $15.2 billion, in fiscal 1951, to a proposed $37.0 billion in fiscal 1961
*
—an increase of
143%! Here are the figures measured by a slightly different yardstick: during the last five years of the Truman Administration the average annual federal expenditure for domestic purposes was $17.7 billion; during the last five years of the Eisenhower Administration it was $33.6 billion, an increase of 89%.

Some allowance must be made, of course, for the increase in population; obviously the same welfare program will cost more if there are more people to be cared for. But the increase in population does not begin to account for the increase in spending. During the ten-year period in which federal spending will have increased by 143%, our population will have increased by roughly 18%. Nor does inflation account for the difference. In the past ten years the value of the dollar has decreased less than 20%. Finally, we are often told that the government's
share
of total spending in the country is what is important and consequently we must take into account the increase in gross national product. Again, however, the increase in GNP, which was roughly 40% over the past ten years, is not comparable to a 143% increase in federal spending. The conclusion here is inescapable—that far from arresting federal spending and the trend toward Statism we Republicans have kept the trend moving forward.

I do not mean to suggest, of course, that things would have been different under a Democratic Administration. Every year the Democratic national leadership demands that the federal government spend
more
than it is spending, and that Republicans propose to spend.
And this year, several weeks before President Eisenhower submitted his
1961
budget, The Democratic National Advisory Council issued a manifesto calling for profligate spending increases in nearly every department of the federal government; the demands for increases in domestic spending alone could hardly cost less than
$20
billion a year.

I do mean to say, however, that
neither
of our political parties has seriously faced up to the problem of government spending. The recommendations of the Hoover Commission which could save the taxpayer in the neighborhood of $7 billion a year have been largely ignored. Yet even these recommendations, dealing as they do for the most part with extravagance and waste, do not go to the heart of the problem. The root evil is that the government is engaged in activities in which it has no legitimate business. As long as the federal government acknowledges responsibility in a given social or economic field, its spending in that field cannot be substantially reduced. As long as the federal government acknowledges responsibility for education, for example, the amount of federal aid is bound to increase, at the very least, in direct proportion to the cost of supporting the nation's schools.
The only way to curtail spending substantially, is to eliminate the programs on which excess spending is consumed.

The government must begin to
withdraw
from a whole series of programs that are outside its constitutional mandate—from social welfare programs, education, public power, agriculture, public housing, urban renewal and all the other activities that can be better performed by lower levels of government or by private institutions or by individuals. I do not suggest that the federal government drop all of these programs overnight. But I do suggest that we establish, by law, a rigid timetable for a staged withdrawal. We might provide, for example, for a 10% spending reduction each year in all of the fields in which federal participation is undesirable. It is only through this kind of determined assault on the principle of unlimited government that American people will obtain relief from high taxes, and will start making progress toward regaining their freedom.

And let us, by all means, remember the
nation's
interest in reducing taxes and spending. The need for "economic growth" that we hear so much about these days will be achieved, not by the government harnessing the nation's economic forces, but by emancipating them. By reducing taxes and spending we will not only return to the individual the means with which he can assert his freedom and dignity, but also guarantee to the nation the economic strength that will always be its ultimate defense against foreign foes.

Notes

* These figures do not include interest payments on the national debt.

C H A P T E R     E I G H T

The Welfare State

               "Washington—The President estimated that the expenditures of the Department of Health, Education and Welfare in the fiscal year 1961 (including Social Security payments) would exceed $15,000,000,000. Thus the current results of New Deal legislation are Federal disbursements for human welfare in this country second only to national defense." The
New York Times,
January 18, 1960, p. 1.

F
OR MANY YEARS
it appeared that

the principal domestic threat to our freedom was contained in the doctrines of Karl Marx. The collectivists—non-Communists as well as Communists—had adopted the Marxist objective of "socializing the means of production." And so it seemed that if collectivization were imposed, it would take the form of a State owned and operated economy. I doubt whether this is the main threat any longer.

The collectivists have found, both in this country and in other industrialized nations of the West, that free enterprise has removed the economic and social conditions that might have made a class struggle possible. Mammoth productivity, wide distribution of wealth, high standards of living, the trade union movement—these and other factors have eliminated whatever incentive there might have been for the "proletariat" to rise up, peaceably or otherwise, and assume direct ownership of productive property. Significantly, the bankruptcy of doctrinaire Marxism has been expressly acknowledged by the Socialist Party of West Germany, and by the dominant faction of the Socialist Party of Great Britain. In this country the abandonment of the Marxist approach (outside the Communist Party, of course) is attested to by the negligible strength of the Socialist Party, and more tellingly perhaps, by the content of left wing literature and by the programs of left wing political organizations such as the Americans For Democratic Action.

The currently favored instrument of collectivization is the Welfare State. The collectivists have not abandoned their ultimate goal—to subordinate the individual to the State—but their strategy has changed. They have learned that Socialism can be achieved through Welfarism quite as well as through Nationalization. They understand that private property can be confiscated as effectively by taxation as by expropriating it. They understand that the individual can be put at the mercy of the State—not only by making the State his employer—but by divesting him of the means to provide for his personal needs and by giving the State the responsibility of caring for those needs from cradle to grave. Moreover, they have discovered—and here is the critical point—that
Welfarism is much more compatible with the political processes of a democratic society.
Nationalization ran into popular opposition, but the collectivists feel sure the Welfare State can be erected by the simple expedient of buying votes with promises of "free" federal benefits—"free" housing, "free" school aid, "free" hospitalization, "free" retirement pay and so on... The correctness of this estimate can be seen from the portion of the federal budget that is now allocated to welfare, an amount second only to the cost of national defense.
*