Libertarians, Take the Government Money and Run

Re: Walter’s post on taking government money or not.

Another argument occurs to me. Start with the premise that the government pays out money to create support for itself. It buys “legitimacy”. In this way of thinking, it keeps raising taxes as long as the marginal gain from buying support exceeds the marginal loss of support from the taxed people. As long as what government gains from swaying people to its side with money favors exceeds the loss in support from added taxes, the government will raise taxes. Equilibrium means no tax change and no change in support. A cut in taxes occurs when the government has gone too far in taxation and is losing more in support than it is gaining in distributing the taxes.

Now we come to the libertarian angle.

Paying money to a dyed-in-the-wool libertarian is an error on the part of the government. It uses resources to gain legitimacy or support at the tax pain margin, but the libertarian is nowhere near the margin of changing from a government opponent to a government supporter. Hence, by taking the funds, the libertarian thwarts the government from using these funds, more aptly from the government’s point of view, to buy support.

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3:36 pm on November 21, 2017