Now This is ‘Twixt Wind and Water

For me, at least.  Dear Jno. Gruber, the fellow who brought us “it’s a good thing American voters are so stupid; otherwise we’d never have passed the ACA,” apparently in April, 2010 mooted the prospect of directly taxing fat people according to their body weight.  This occurred in a short (two-page) essay he published in the magazine of the National Institute for Healthcare Management.

Gruber places the idea of a direct tax on being a lard-ass in the context of a sin tax, such as cigarettes and alcohol.  Being Gruber, of course, he generously concedes that taxing the things that “cause obesity” is trickier than tobacco or booze taxes, because “while every cigarette is bad for you, clearly some food consumption is good for you!”  Wonder if that insight was part of his dissertation.  And — gotta love how this ol’ boy is awash in empathy for his fellow (if hopelessly stoopid) Americans — “A simple tax on calories could do more harm than good by deterring low-income people from getting enough nutrition. Likewise, the very complicated relationship between different types of food consumption and health poses significant challenges.”  You mean that something as complicated as human nutrition in a heterogeneous society, in which there are vast variations in what people eat, how they eat it, when they eat is, what effect it has on their bodies, and what they’re doing with the bodies they have so bewilderingly fed is actually — one’s heart bleeds for poor Jno. — beyond him?  Forsooth!

But don’t worry; Jno’s got it figured out.  You just directly tax the lard-asses.  “Ultimately, what may be needed to address the obesity problem are direct taxes on body weight.”  It’s touching, really, to see once again the left’s instinctive reaction to anything they don’t like: tax it.  Sort of like The Economist’s recent cover story.  The cover displays a man bounding down a mountain of oil barrels.  The lead editorial is to the effect that we should “Seize the Day” of low energy prices to . . . tax energy.  Really, that’s what their notions of how to “rationalize energy policy” boil down to.  Let’s take a momentary (and it is momentary, as recent spikes in pump prices of $0.10/gallon or more in less than two days have shown) downward price deviation in one of the most unforgivingly expensive items the typical American has to buy a great deal of, and make it artificially even more expensive.  You’d think that a publication that calls itself The Economist would be familiar with the old Wall Street saw “never mistake trend for destiny.”  Gasoline at $1.72 a gallon (around here) is a brief let-up; those taxes will be there forever, even when it’s back up to $3.25 a gallon.

Think that having to fork over a chunk of change to the government, to do with as it pleases, based on what your bathroom scale says (actually, it would have to be government scales, and how frequently would you have to weigh in?), is perhaps a bit . . . intrusive?  Don’t worry, so Gruber:  It’s already happening “indirectly” in how employers are allowed to charge back health insurance premiums for their deep-draft workers.  “Currently, employers may charge up to 20 percent higher health insurance premiums for employees who fail to meet certain health-related standards, such as attaining a healthy BMI. The new health reform legislation increases this differential to 30 percent, with the possibility of rising to 50 percent.”  Let’s disregard for the moment the fact that BMI has been pretty thoroughly de-bunked as a useful measurement of health risk; many professional athletes have high BMI and would therefore be treated — and taxed — the same way as your ‘umble correspondent here, who is (just keep repeating: “honesty is the best policy”) a fat body.

What Jno. is disregarding here is the distinction between a price and a tax.  The one is a bargained-for term of voluntary exchange which captures each side’s needs and limitations.  The other is an involuntary exaction the amount of which has no bearing on either side’s requirements, and which is determined wholly without reference to the subject matter of the transaction.  To illustrate:  Requiring everyone who receives more than a certain amount of “income” (as defined) during a year to pay over $0.40 of each dollar above that arbitrary limit has zero to do with whether being able to retain only $0.60 of each dollar is appropriate to the circumstances under which that dollar of “income” was generated.  Your only alternative to paying $0.40 is not to receive the income at all.  Charging me $3.25 a gallon for gasoline leaves me with any of several alternatives: I can so arrange my transportation needs as to minimize the amount of driving I must do; I can, within limits, change my mode of transportation (getting rid of my F-350 for an F-150, for example); I can switch from gasoline to diesel, and hope to compensate for an even higher per-gallon price by increased miles per gallon; I can shop around for someone who will charge me only $3.19 per gallon.  As Thos. Sowell pointed out, for decades Alcoa controlled almost the entire American market for aluminum.  Yet during that period the price of aluminum fell by something like 95%; why?  Because there were many substitutes for it.

Insurance premiums for the seriously obese should be higher.  “Insurance” is a contractually-agreed allocation of risk between an insurer and an insured.  The laws of large numbers enable an insurer to calculate, with a varying degree of exactitude, precisely how much of Event X it may expect over a given Population N of insureds who are exposed to the risk of Event X.  It can therefore, for a fairly small price relative to the cost of each Event X, promise to take some portion of that risk off an individual insured’s hands.  It’s math, pure and simple.  Math being rather merciless, however, when there is more of Event X to be expected among Population N or for any specific member of Population N, the aggregate risk that must be apportioned increases, and if you don’t want to break your insurer, so that now, ex-post and after they’ve already parted with the money they thought would relieve them of some or all of that risk, the risk of Event X gets re-allocated back onto the individual members of Population N, then you’ve got to recover that aggregate cost of Event X from Population N.  Period.  You cannot change the math of it.

The Grubers of the world see no moral or functional distinction between a price and a tax.

As Hayek and others pointed out long ago, prices and their movements allow the free flow of incredibly complicated information among enormous groups of people almost none of whom can be in direct communication with each other.  I have no idea what it takes to plant, tend, harvest, and process a tree, anywhere in the world.  I can see, however, what that 2×4 down at Lowe’s costs me, and I can decide whether to build that garbage can enclosure or not.  I can tell my contractor that I’ll forego finishing my basement just now because those 2x4s just cost too much, for me, right now, and with the specific other demands on my earning capacity as of right now and as I can foretell them.  Prices in a free market allow the development and flourishing of what Hayek called an “extended order” of voluntary cooperation.

Taxes are the antithesis of prices.  Taxes are not imposed based on millions of individual decisions taken by mutually independent actors.  They are centrally determined, in kind and amount and purposes to which put, and then they are imposed outward and downward.  Taxes communicate nothing; in fact, being involuntary they cannot communicate anything.  They are an exercise in coercion pure and simple, whereby one group seizes the property of another group to use it for purposes determined utterly without reference to the needs or desires of the group from whom seized.  The “sin tax” on lard-asses like me would generate revenue streams for the government that would be used for purposes utterly unrelated to the ostensible reason the tax was collected.  Just like “sin taxes” on booze and tobacco aren’t used to reduce drunkenness or nicotine consumption, or to make better any of the conditions caused by either.  Those moneys get plowed into re-paving roads every four years whether they need it or not, or building hilarities like a “land port” in a downtown area, to sit vacant and all-but-abandoned for several decades.  Or they get put into “higher education,” which these days means hiring more administrators, “diversity coordinators,” and sundry grievance-mongers, rather than improving the library system or putting more or better professors in front of classrooms.  Or they will fund the travel and entertainment budgets of agencies like the IRS, with their $50,000 demonstrations of painting (seriously, that happened, at the same time the IRS was targeting taxpayers based on their political views).

Gruber’s equating prices and taxes is more than a little bit of a Freudian slip.  We must always, always bear in mind that leftism is inherently coercive and irreconcilable with human liberty.  You cannot be a leftist and at the same time be a friend of human liberty.  Cannot be done.  You may believe that you have identified values which rank higher on whatever scale you choose than human liberty, and we can have a good-faith debate on whether you are right.  But you cannot pretend to be for both.  Gruber is a leftist.  As his now-revealed comments about the design and passage of the “Affordable” Care Act show quite plainly, he relishes the notion of sticking it to John Q. Public without the latter’s even realizing what’s being done to him.

When a leftist like Gruber tells you that a price is the moral or functional equivalent of a tax, he is doing neither more nor less than projecting his own desire for coercive power onto the participants in one of Hayek’s extended orders.

But, as I mentioned at the top of this post, I’m a lard-ass, and as such I have problems with proposing to tax my ass (literally) so that the University of Blank can hire another “counselor” for the “victims” of “microagressions” like being told that the intricacies of differential equations do not vary by the skin color of the student.

Leave a Reply