It’s so easy to forget that Congress taxes us not so that it can stare at our money, but to spend it. Which means every dollar Congress extracts in taxes is an extra dollar of control politicians have over the economy.
It’s something to think about as President Trump threatens to repeal Harvard’s tax-exempt status. Those who claim they’re for limited government while cheering Trump’s threatened repeal on should know better.
Assuming there’s a constitutional way for Trump to extract millions and perhaps billions from Harvard, that just means Congress will have millions and perhaps billions more capital under its control. Harvard’s endowment pursues returns rooted in allocating capital to its highest market use, while Congress consumes precious capital in politicized fashion…What’s not to like? Don’t worry, there’s more.
As Trump makes known his desire to beat up Harvard, and surely more “elite” universities, other conservatives are making noise about the “perks” that university professors enjoy. According to a recent opinion piece by UC Berkeley law professor Steven Davidoff Solomon, “Perhaps the sweetest perks Stanford and other elite universities provide are the multimillion-dollar tax-free housing and tuition stipends they lavish on faculty, staff and their children.”
Solomon informs readers that the “benefits universities provide to staff and their and their children vary but are consistently extravagant,” and that it’s “long past time to close these tax loopholes.” It troubles Solomon “that because these gifts are all exempt from income tax, taxpayers foot the bill.” Solomon gets it backwards.
Those not associated with “elite” universities, and not related to professors showered in perks aren’t left with a bill to pay for those who are. Quite the opposite. The less money flowing to Washington, the less of a burden that Washington is on all of us.
That is so because the true burden of government is in the extraction of precious wealth from the private sector, followed by the spending of the wealth extracted. Central planning of resources that is economy-crushing in total is hardly elevating if imposed in more limited fashion.
No doubt the various deficit hawks will disagree, and they’ll frame their disagreement in the same deficit and debt alarmism they’ve been foisting on readers for as long as they’ve been writing for the public. But for one problem: their alarmism, like Solomon’s with regard to who is footing the alleged tax-break bill, is backwards.
Missed by the debt alarmists is that in all walks of life, debt is an effect of market trust in the present and future earnings of the borrower. Translated, the U.S. Treasury has borrowed in enormous amounts and will continue to borrow in enormous amounts precisely because it takes in way too much tax revenue now, and is expected to take in exponentially more in the future.
Applied to Harvard, its professors, and this weird desire of limited government conservatives to use government to “own” Harvard and its elite professors, how very self-defeating. Enhancing government power is always and everywhere wrongheaded even when the power is used to crush the other side, and it’s even more self-defeating to enhance the federal government’s ability to tax.
All that, plus it ignores the real crisis. Contra mis-informed conservatives, the crisis isn’t the day they’ve been promising for decades when lenders will cease loaning to the richest country on earth, rather the crisis is in the extraction. How sad to see conservatives looking for ways to increase the government’s take, all the while cheering those in government who are all too willing to do the taking.
