More Government Without Paying For the Lunches Of Others

Story Stream
recent articles

Who would willingly choose to add a government to their lives? It certainly sounds like something unexpected, but could it actually make sense? Amazingly enough it can if adding a government allows you to stop another government from picking your pocket.

Here in Georgia where I live, new cities have been popping up around the metro Atlanta region. In regions that were unincorporated parts of Fulton County (the county containing Atlanta), four new cities now exist, meaning their residents have added a city government to their lives. The new cities (John's Creek, Milton, Sandy Springs, and Chattahoochee Hill Country) were not formed because the prospective residents wanted to add a layer of government to their lives. They were formed to deprive politicians of the right to tax their income for the purpose of giving services to others.

Prior to the formation of the new cities, all of those areas were paying far more in taxes to their county government than they received back in services delivered. The citizens of the new cities were overpaying so that Fulton County could provide services to poorer areas of the county whose citizens were not paying for the level of services being delivered to them. In other words, the people who formed the new cities were paying to provide free lunches to many of those they left behind.

As governments at all levels have become more involved in income transfer programs and taxation has become more progressive, economic issues will continue to push to the forefront more and more. It is not just the federal government anymore that is in the income redistribution business.

Most local governments rely on property and sales taxes, not income taxes. However, if taxes (not user fees) provide the bulk of the revenues and if the local government spends a significant share of its expenditures on targeted programs that only benefit a segment of its residents, then the local government can accomplish some significant income redistribution.

Some local government redistribution programs are hardly noticed. For example, public schools are a huge transfer from the general taxpayers to those local families with children that attend those schools. Others are more obvious, such as local after-school programs, public health offices and subsidies to county hospitals, community centers in poorer neighborhoods, and most public transit systems.

Back in metro Atlanta after the formation of these new cities, some local government services are delivered by the new cities and others by the county government. The new city residents now pay taxes to their new cities and still pay some taxes to the county government, but their total tax bills are the same or lower than they were before.

This is possible, even though the residents believe that they are receiving more and better services from the new cities than they received from the county, because the new city residents are not paying the "free lunch tax" anymore. The new cities are providing valuable services that help everybody. They are not looking for programs that benefit only some, targeted residents. They are trying to stay away from free lunch programs.

As the ascendancy of the Tea Party shows, a significant segment of taxpayers are tired of paying for free lunches for citizens who pay little or no taxes. If politicians continue to overdo the taxation on those who are paying for the free lunches, they risk them leaving either by moving or, as happened in these cases, by forming a new government of their own.

Obviously, one avenue for protesting all these free lunches is to elect new politicians who do not support endless income redistribution schemes. At the local level, people have a second option-forming an entirely new government (a new city or new county). Even at the state level, there are occasional, mostly feeble, attempts to form a new state. For example, there has been talk of splitting California into two, or even three, separate states. Libertarians have talked about all moving to New Hampshire are creating an ideal state government. However, the realistic sphere for new "protest" governments is at the local level.

At the city or county level it is feasible to form a new government, manageable to elect a new set of city councilors or county commissioners, and even possible for a small number of determined people to pressure their local elected officials on particular policies.

The four recently formed cities in metro Atlanta have provided strong real-world evidence that it is possible to form new cities and to put a stop to at least the local level of income redistribution through the provision of government-delivered free lunches. The new city governments are all very cost-conscious, efficiency-focused, and try very hard to be responsive to their citizens.

They still get some of their revenue from property taxes, so there is still some progressivity to their funding structure, but these new cities concentrate on delivering basic services to all their citizens, not running programs designed specifically to benefit only some, select groups.

At a time when around seventy percent of the federal government's total expenditures are on programs that basically redistribute income from one group to another, there is a strong desire in the country for some back-to-basics government that provides the services we want without trying to impose a social vision on us.
Government is supposed to provide public goods that cannot be easily provided by the free market-national defense, parks, etc.-along with setting the rules through laws, standards, and regulations. Government actions should benefit all citizens, not some. Whenever governments decide to favor one group (the poor, powerful corporations, hedge fund managers), it is likely to annoy a fair percentage of the people having to pay the bills for that favored group.

Perhaps these new Georgia cities can serve as object lessons for others governments around the country, from the local to the national level. While I do not expect any stampede by governments away from free lunches back to providing basic government services for all, maybe these examples can convince at least some politicians and citizens to work toward slowing or reversing this trend of government as social instrument. If that happens, it would be a wonderful thing.

Jeffrey Dorfman is a professor of economics at the University of Georgia, and the author of the e-book, Ending the Era of the Free Lunch

Show commentsHide Comments

Related Articles