Taxes and Spending

Ronald Reagan's faithful followers claim he has used his skills as the Great Communicator to reverse the growth of Leviathan and inaugurate a new era of liberty and free markets. Reagan himself said, "It is time to check and reverse the growth of government."

Yet after nearly eight years of Reaganism, the clamor for more government intervention in the economy was so formidable that Reagan abandoned the free-market position and acquiesced in further crippling of the economy and our liberties. In fact, the number of free-market achievements by the administration are so few that they can be counted on one hand—with fingers left over.

Modern liberalism works in a simple but effective manner: liberals Find Problems. This is not a difficult task, considering that the world abounds with problems waiting to be discovered. At the heart of these problems is the fact that we do not live in the Garden of Eden: that there is a scarcity of resources available for us to achieve all of our desired goals. Thus: there is the Problem of X number [to be discovered by sociological research] of people over 65 with hangnails; and the Problem that there are over 200 million Americans who cannot afford the BMW of their dreams. Having Found the problem, the liberal researcher examines it and worries it until it becomes a full-fledged Crisis. 

Hosannas have poured in from all parts of the academic spectrum — left, right, and center — hailing the Treasury's draft plan as an approach to the ideal of the "flat tax." (Since the plan calls for three classes of income tax rates, it has been called a "flat tax with bumps.") This near-unanimity should not be surprising, because a flat tax appeals to the sort of academic who, regardless of ideology, likes to push people around like pawns on a chessboard.

The virtue of the profit system is that it puts on improvements a premium high enough to act as an incentive to take high risks.