I was given a Kindle for Christmas. I downloaded Ben Franklin’s autobiography and have just finished reading it. What we tend to remember about Mr. Franklin’s writing are the proverbs or short phrases from Poor Richard’s Almanac, such as “a stitch in time saves nine” or “a penny saved is a penny earned.” What we tend to forget is how leisurely the writing of that era was, and how complex the sentences are. It seems that writers felt the need not merely to express a thought but also to explain that thought within a single sentence. They assumed that the reader had the time and patience to wade through such complex sentences and understand them. Today this style of writing seems quaint and rambling, like a pastoral scene stretching far off into the horizon. Such an image, however, ignores the issues addressed in many of those writings. Many of those issues are very similar to today’s issues. As the reader shall see in the following paragraphs, I am having some fun with the language and the issues.
In regard to the services it is deemed desirable and necessary for the government to perform for the greater good of its citizens and their communities, there is inevitably an argument as to who reaps the greater benefit there from, and who should, therefore, bear a larger proportion of the costs thereof. There are those who say that men of wealth and substance have obviously benefited the most from those services and are better able to assume the burden of paying the costs thereof; in saying this, however, the people subscribing to that notion are ignoring the investments such virtuous men have already made to our society and our common welfare; investments by which those men have secured the land on which so many have now settled and thereby made productive.
Requiring the proprietors of the colonies to contribute sums of money to pay for the common defense of our communities and the expenses incurred by enforcing the laws to insure the order necessary for the peaceful pursuit of commerce and the conduct of business enterprises from which we all benefit would violate the charters of the proprietorships and discourage further investments by those proprietors; this is true regardless of the fact that those proprietors have already profited greatly from the sale of the land which the settlers have purchased from them. Furthermore, the proprietors and other men of wealth and substance are now paying a disproportionate share of the expenses of governing in order secure legislation favorable to the conduct of their businesses; they are doing this by contributing money for the campaigns and general welfare of the gentlemen who represent us. It is incumbent upon us, therefore, to levy taxes only on the settlers and the owners of smaller businesses that do not contribute as much to our society, even though the burden of such taxes will consume a larger percentage of the incomes of those individuals than would be the case if the proprietors and other gentleman of wealth and substance were also paying such taxes.
Although the above paragraph is fictional, it is not far fetched. During the French and Indian War the proprietors of the colonies, such as the Penn family, were making a similar argument. In fact, the Pennsylvania Assembly sent Ben Franklin to England to argue that such proprietors should help pay for the war. You will undoubtedly notice that I have interjected into the fictional paragraph a comment about campaign contributions and lobbying. This is not far fetched either. Even in colonial times the commercial interests were well represented and there was a form of lobbying. In modern times, the argument advanced in regard to who should be taxed was best summarized by Leona Helmsley when she said “only the little people pay taxes.” Her statement was, of course, refuted much to her detriment. The question today is not who should pay taxes, but rather how much different groups or classes of people should pay. What I mean by that is that the same arguments I have stated above are being used to attack the concept of a graduated income tax.
The attack on the graduated income tax became effective when Ronald Regan greatly decreased the percentage of income the wealthy were paying in taxes. The attack was greatly accelerated by George W. Bush’s further reduction of taxes on the wealthy. Both tax cuts resulted in huge federal deficits and failed to produce the jobs used to justify the reduction in revenues. President Obama tried to reach a compromise to tax all citizens the same percentage on the first two hundred fifty thousand dollars of income and a higher percentage on amounts above two hundred fifty dollars thousand dollars. The Republicans rejected the compromise and are doing their best to eliminate the graduated income tax.
The graduated income tax is not only desirable because it is equitable but also because it is very sound economics. In our market driven economy allowing more people to retain a greater share of their income allows them to purchase more goods and services, thereby creating the demand that stimulates the economy and produces more jobs. Decreasing the tax burden on people who can already afford to purchase the goods and services they desire does not increase demand or stimulate the economy, which is why giving tax cuts to the wealthy does not create jobs. It is that simple.
This brings up the subject of taxes and government services in general. In his autobiography, Mr. Franklin discussed a road in a commercial district of Philadelphia. The portion of that road lined by stores and other businesses was paved. The problem was that the dirt form the unpaved part of the road blew onto the paved portion during the dry season, and horses, wagon wheals and the shoes of pedestrians tracked mud onto the paved portion of the road during the wet season; this made the benefits of the paved portion of the road seem somewhat dubious to the businesses located there. Ben Franklin addressed this issue by paying someone to sweep the paved portion of the road for several days. When the benefits of cleaning the paved road became apparent to the owners of the businesses there Mr. Franklin asked those owners to subscribe to that road cleaning service. The owners of those businesses readily agreed to pay a small fee for that purpose. People owning businesses on unpaved roads then petitioned the government to pave and clean those roads. The benefits of having the government perform those services were great enough to make the owners of the businesses agree to pay the taxes necessary for those services.
Ben Franklin also used his ability to solicit subscribers when he convinced wealthy individuals to pay for the building of a hospital and to help defray some of costs of the services provided by the care givers employed there. One of the arguments slave holders used to try to justify that horrible institution was that the slaves were well cared for because healthy, well fed workers were stronger and more productive. Nothing could justify slavery, and a large number of the slave holders were not that wise. The argument that healthy, well fed workers are more productive, however, is true. Providing affordable health care is not only morally right it is also sound economics.
Mr. Franklin’s foresight can also be seen in the establishment of a college that became the University of Pennsylvania. Once again he solicited subscribers to pay for the building of the school and to pay a portion of the cost of providing a higher education to deserving students. The benefits derived from providing that education become so apparent that many colleges both private and public were eventually established.
The point is this: the benefits of the services our taxes pay for often seem remote unless the government is not providing those services. Ben Franklin demonstrated the benefits of many of those services by finding a way to provide them through subscriptions. Far from being opposed to the government providing those services, he actually advocated it. Was he our first liberal? Conservatives would deny it because it does not conform to their philosophy of small government. They want us to believe that our founding fathers are sacrosanct, and that none of our founding fathers could possibly be tax and spend liberals! The conservatives are wrong. Freeing us from an empire that actually stifled our industry was only a small part of what they accomplished. They also established a form of government that was flexible enough to provide the infra structure, the regulations, and the other services needed to make this the most prosperous nation on earth. Their commitment to their nation and their communities also set the tone for the leaders who followed them.
At its best ours is a society that rewards public service and sacrifices made for the general good. At its worst it is a society that rewards exploitation, and the greed of the privileged few who have the where with all to exert an undue influence on our government. The health, education, and opportunity to improve our circumstances are vital not just to the individual citizens of this country but also to the welfare of our nation as a nation. Many are the hard battles we have fought in order to make the lofty ideals stated by our founding fathers a reality. Many are the battles we have fought and must continue to fight to provide opportunities for our workers who want to secure decent wages for producing goods here in this country. We must also fight for the small entrepreneurs who want the opportunity to compete with the mega corporations that are now exporting our jobs. If there is anything we should have learned from our history, it is that an equitable society that rewards initiative and hard work is a prosperous society; whereas a society that allows the wealthy to greatly increase their wealth at the expense of everyone else is a failing society!
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