The above semantic exercise is prologue to the argument over whether those who don’t pay any federal income tax, but do pay their FICA premiums, are actually legitimate taxpayers just like those who pay both. As a generalization, I might observe that folks of a Left-leaning mind-set insist that FICA-payers are real taxpayers, while folks of a Right-leaning mind-set are more likely to argue that, when the legislation mandating the payment specifically calls the future-pay-out program insurance, then it is indeed an insurance premium and not a tax. This is more than an argument over whether a non-quacking duck is still a duck; it goes to the question of the percentage of US citizens who enjoy all governmental services without paying for them. And that, in turn, is relevant because it goes to the question of innate human behavior, and whether people who are shielded from paying for any government service are more inclined to vote for more of it than those who aren’t so shielded. (Think Act 60 and Son-of-60, 68, and the income-sensitivity provision of the property-tax program which funds the public schools; presently, Dwinell Political Report publisher James Dwinell reports from Randolph, well over half of Vermont home-owners are shielded from paying the full costs of school-budget growth they have been voting for.)

People who think and write about such things have recognized the problem, from philosopher Plato in Classical Athens to politician Ari Fleischer in present-day Washington, who recently (13 April 09) had an op-ed in the Wall Street Journal entitled “Everyone Should Pay Income Taxes”, his thesis focusing on the adverse effects on the overall economy (supported only by actual tax-payers) of the pro-spending voting tendencies of non-tax-payers. The best quote, in my opinion, comes from 18th century Scottish professor Alexander Tyler: “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they vote themselves largesse from the public treasury…” or, to be more precise, the majority legally placing the monetary burden on the minority, who, of course, will eventually flee or resist. (Think California’s past experience with the pattern of upper-income real-tax-payer flight, one which Vermont is about to repeat.) A similar quote comes from 19th century French commentator on all things American, Alexis de Tocqueville: ”A democratic government is the only one in which those who vote for a tax increase can escape the obligation to pay for it”, an eerily apt description of the design intent of Acts 60 and 68. It’s probable, maybe not proveable, that Vermont wouldn’t be #1 in the Nation for tax burden if it weren’t for its highly ‘‘progressive” tax system, in which the majority votes for the minority to pay the costs of various free-to-them goodies.

At the national level, it’s widely documented that over half –the dominant voting majority-- of all citizens are tax-exempt, voting for benefits they don’t help pay for; the rebuttal of these non-tax-payers is that they pay FICA “taxes”, which, of course, are better described as personal retirement insurance premiums: within broad limits, what you pay in determines what you eventually are paid out. As a 2006 Tax Foundation study (which shows, for example, that 66% of household 1040 filers pay no tax) drily observes, non-paying majorities are “indifferent or will positively oppose” tax reform, just as Alexander Tyler predicted. The solution to the representation-without-taxation (R-W-T) problem is as obvious as it is unachievable: that everyone pay at least a token tax amount for the government services they want. Skin in the game, you might say.

Tyler predicted governmental collapse. In an era before American States, he didn’t predict inter-State tax-payer flight. Now, in a pattern which is already well-defined, payers flee from R-W-T jurisdictions, in a self-reinforcing cycle where those States they flee become even more R-W-T while their destinations become less so; in fact, when real taxpayers relocate, everyone in their destination State benefits, tax wise. Taken to its logical conclusion, it means eventual bankruptcy for high R-W-T States, a prospect which their Legislatures won’t fix because, as the Tax Foundation observes, once the non-payers out-number the payers, they can vote whatever they want from the minority.