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Milton Friedman in His Own Words

April 23, 2005

A reader of my recent article, "The Curse of the Withholding Tax," received, directly from Milton Friedman, this quote from his memoirs, Two Lucky People (Univ. of Chicago Press, 1998, p. 123), about his role in the withholding tax:

"Far more important, without a system of current collection, it would have been impossible to collect the amount of income taxes that we collected during the war. At the time, we concentrated single-mindedly on promoting the war effort. We gave next to no consideration to any longer-run consequences. It never occurred to me at the time that I was helping to develop machinery that would make possible a government that I would come to criticize severely as too large, too intrusive, too destructive of freedom. Yet, that is precisely what I was doing. Rose has repeatedly chided me over the years about the role that I played in making possible the current overgrown government we both criticize so strongly. That is in jest, since withholding would have been introduced had I been involved or not. The most I accept blame for is helping to make it more efficient than it otherwise might have been."

The root of Friedman's error: "promoting the war effort."

As a wiser man than Milton Friedman once said, "War is the health of the state."

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