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Category Archives: Libertarian

Tax Consumers, Taxpayers, and the Cox Box

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Years ago I joked that every economists highest goal was to have a graph or concept named for him or her. Among the existing ones are the Keynesian Cross Graph, the Edgeworth Box, the Phillips Curve, the Laffer Curve, Rothbards Law, Buridans Ass, Misess Butler, Humes Specie-Flow Mechanism, Rostows Stages of Growth, the Ricardo Effect, Mengers Law, the Beveridge Curve, and Hayeks Triangles.

I came up with a way of visually depicting libertarian class analysis in the 1980s but never shared it beyond a friend or two. But now I immodestly present what I have called the Cox Box.

Libertarian class analysis is based on two classes in regard to government: the taxpayers and the tax consumers. It is important to note that libertarian class analysis predates the better known Marxist class analysis of workers and the owners of the means of production (capitalists). Marx published his class analysis in 1848, whereas the libertarian class analysis of J. B. Say and Charles Dunoyer was developed in 1810 and by James Mill in the 1820s and 1830s.

Here is how John Calhoun stated libertarian class analysis in his Disquisition on Government in 1848:

The necessary result ... is to divide the community into two great classes: one consisting of those who, in reality, pay the taxes and, of course, bear exclusively the burden of supporting the government; and the other, of those who are recipients of their proceeds through disbursements, who are, in fact, supported by the government; or in fewer words, to divide into tax-payers and tax-consumers. ... The effect ... is to enrich; and strengthen the one, and impoverish and weaken the other.

So, how to depict the correct libertarian class analysis? Here, I depict it as a box with income levels along the one axis and a division of taxpayers and tax consumers along the other axis wherein half of all income levels are net taxpayers and half are net tax consumers. Figure 1 represents a hypothetical economy in which net tax consumption does not vary by income level:

Figure 1: A neutral Cox Box.

We know, however, that tax consumption can very significantly at various income levels. What are some of the specific examples of the ways one is a tax consumer in the modern US? Among the higher incomes these transfers include farm subsidies, mortgage guarantees, bank bailouts, overseas marketing subsidies, and the recent Quantitative Easing to pump up the stock market (to name only a few of the many). At the lower income levels, these transfers include the SNAP program, rent subsidies, unemployment benefits, and Medicaid (again, to name only a few of the many).

Conservatives believe the appropriate depiction is reflected in Figure 2, which features an economy in which higher income earners pay the bulk of all taxes (not just income taxes) while receiving little in return, and the welfare-enabled lower income earners pay very little of all taxes (not just income taxes) while receiving much in unearned payments:

Excerpt from:

Tax Consumers, Taxpayers, and the Cox Box

Libertarian group quietly emerges in Gregg County

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A third party is quietly emerging in Gregg County, where one proponent of the Libertarian movement is explaining who they are.

We are too liberal for the Republicans, and we are too conservative for the Democrats, Gregg County Libertarian Chairwoman Brandee Brown said. Most people in East Texas are very libertarian-minded Little L. And they have a hang-up with (legislating) social issues.

A couple of examples might help: Libertarians dont take a stand on gay marriage or decriminalization of marijuana, as part of their live-and-let-live philosophy; the party also believes people, not the government, should be helping those who lack adequate food, housing or other necessities.

Thats not to say we dont believe in helping other people we do, said John Spivey, a Fort Worth party member who directs, libertarianboosterpac.org, which helps candidates with marketing and building their own websites.

The social tolerance tends to work more for most social liberals or Democrats, he said. And the fiscal conservatism tends to work well for Republicans and tea party people.

He said $2 out of $3 of the trillions of dollars the government takes from taxpayers for welfare programs simply feeds the bureaucracy.

And one-third of that money gets to the people who need it, he said. Wed rather give to organizations where 90 percent goes to the needy.

But, would churches, nonprofit agencies or individuals reliably donate those trillions of dollars?

Keep in mind that two-thirds of that is going to the (federal) apparatus, Spivey replied. Could they take care of roughly one-third of that? I believe they can.

Diane Day of Longview, who urged Brown to investigate the party, said she had been attracted to it by her disillusion over the two dominant parties. She heard former Rep. Ron Paul making the same point, too.

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Libertarian group quietly emerges in Gregg County

Third party quietly emerges

Posted on by

A third party is quietly emerging in Gregg County, where one proponent of the Libertarian movement is explaining who they are.

We are too liberal for the Republicans, and we are too conservative for the Democrats, Gregg County Libertarian Chairwoman Brandee Brown said. Most people in East Texas are very libertarian-minded Little L. And they have a hang-up with (legislating) social issues.

A couple of examples might help: Libertarians dont take a stand on gay marriage or decriminalization of marijuana, as part of their live-and-let-live philosophy; the party also believes people, not the government, should be helping those who lack adequate food, housing or other necessities.

Thats not to say we dont believe in helping other people we do, said John Spivey, a Fort Worth party member who directs, libertarianboosterpac.org, which helps candidates with marketing and building their own websites.

The social tolerance tends to work more for most social liberals or Democrats, he said. And the fiscal conservatism tends to work well for Republicans and tea party people.

He said $2 out of $3 of the trillions of dollars the government takes from taxpayers for welfare programs simply feeds the bureaucracy.

And one-third of that money gets to the people who need it, he said. Wed rather give to organizations where 90 percent goes to the needy.

But, would churches, nonprofit agencies or individuals reliably donate those trillions of dollars?

Keep in mind that two-thirds of that is going to the (federal) apparatus, Spivey replied. Could they take care of roughly one-third of that? I believe they can.

Diane Day of Longview, who urged Brown to investigate the party, said she had been attracted to it by her disillusion over the two dominant parties. She heard former Rep. Ron Paul making the same point, too.

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Third party quietly emerges

The Libertarian State of the Union: The Future of the Affordable Care Act (Mike Tanner) – Video

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The Libertarian State of the Union: The Future of the Affordable Care Act (Mike Tanner)
Follow the link below to watch the full event: http://www.cato.org/events/libertarian-state-union-2014 Featuring Chris Edwards, Director, Tax Policy Studies,...

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The Libertarian State of the Union: The Future of the Affordable Care Act (Mike Tanner) - Video

The Libertarian State of the Union: Issues in Constitutional Law (Ilya Shapiro) – Video

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The Libertarian State of the Union: Issues in Constitutional Law (Ilya Shapiro)
Follow the link below to watch the full event: http://www.cato.org/events/libertarian-state-union-2014 Featuring Chris Edwards, Director, Tax Policy Studies,...

By: catoinstitutevideo

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The Libertarian State of the Union: Issues in Constitutional Law (Ilya Shapiro) - Video


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