Until recently, when I read about the Revolutionary era, I devoted most of my attention to my three favorite Founders, John Adams, Thomas Jefferson and James Madison, studying less the events which inspired them to rebel, focusing instead on the ideals which inspired them to establish our republic.
In recent years, I have expanded that list of favorites to include not just the father of our country, but also a man dubbed the “First American“, Benjamin Franklin. And in studying these two great men, I considered not just their actions during and after the American Revolution, but also in the period which lead up to it. As I read (and listened via Books on CD) to their biographies I learned why both Washington and Franklin, once loyal British subjects, broke with the “mother country.”
Fighting in the French and Indian War, Washington learned that a “colonial” could not advance in the ranks as could a counterpart born in Britain, particularly one born there wealth and privilege. One’s birth, not one’s merit, determined the rank to which he could rise — and the leadership posts he could assume.
Building his own business from scratch, Franklin learned that in a “Proprietary” colony, there were two sets of laws, one which applied to certain families, the other to everyone else.
They believed that the law should make no distinctions based on class.
Yesterday, in the Wall Street Journal, Harvey Golub, a former chairman and CEO of American Express, responding to Warren Buffett and the president, critiqued the current American tax system and showed that it now privileges certain favored “classes”:
. . . the extraordinarily complex tax code is replete with favors to various interest groups and industries, favors granted by politicians seeking to retain power. Mortgage interest deductions support the private housing industry at the expense of renters. Generous fringe benefits are not taxed at all, in order to support union and government workers at the expense of people who buy their own insurance with after-tax dollars. Gifts to charities are deductible but gifts to grandchildren are not. That’s just a short list, and all of it is unfair.
Governments have an obligation to spend our tax money on programs that work. They fail at this fundamental task. Do we really need dozens of retraining programs with no measure of performance or results? Do we really need to spend money on solar panels, windmills and battery-operated cars when we have ample energy supplies in this country?
(Rad the whole thing.) In short, the government will subsidize you if you produce (or purchase) the kind of goods you want. Our government today thus practices a type of favoritism which once spurred Washington and Franklin (among countless others) to break with the mother country. They did not want a government which picked favorites.
We would better honor the spirt of our Founders if we eliminated the numerous loopholes and subsidies in our federal tax and regulatory infrastructure.
Expect to post more on this idea in the coming months.