Bob Thomas: Let’s take another good look
November 15, 2012
“Humility is no substitute for a good personality.” — Fran LebowitzCitizen Russ Law, a faithful reader, sent a recent letter to the editor scolding me, in a nice way, for insinuating that public employees don’t earn their pay because I refer to them as “tax takers.” Russ says the correct description should be “tax earners.” I agree.Of course, in previous columns I’ve made it clear many times that the public employees I know, and there are dozens as I worked closely with the State of Nevada Employees Association when I was a legislator, are as competent and hard-working as those I’ve worked with in the private sector. My use of “tax taker” was my attempt to shock you readers into differentiating those whose incomes are earned from tax dollars from those whose incomes are earned in the private sector.Now I’m going to once again attempt to explain the ramifications of this in more understandable terms. In my last column on this subject, I clearly showed that it takes the income taxes from about five private-sector taxpayers to pay the salaries and benefits of one tax earner (tax taker), give or take a few bucks. That can’t be helped. That’s just the way it is. That means that if we fail to maintain the correct balance between taxpayers and tax earners we either go into debt, or we fail to offer essential services. It really is that simple.What happened with Obama’s failed stimulus money? He gave it to the states and municipalities to be used for infrastructure (shovel-ready jobs), but they used the money to keep existing employees on their payrolls even though they were no longer very busy. And while the states and municipalities were saving public-employee jobs, millions of private-sector employees were being laid off because of the recession, further deepening the recession. So the balance between taxpayers and tax earners went all to hell in the direction of increased national debt. It wasn’t because more tax earners were being hired, which many people thought. It was because millions of private-sector taxpayers had been and were being fired, no longer paying income taxes.I don’t know why pedigreed economists who are routinely quoted by the media can’t grasp the simplicity — and I don’t mean oversimplification — of the fact that there must be balance at all times between taxpayers and tax earners or our economy gets out of sync, compounding the effects of recessions. The two economists who understood this were Milton Friedman — may God rest his soul —- and Arthur Laffer, who is much maligned by those worshipping at the altar of complexity. We’ll never beat this rap until we enact strong legislation, or a constitutional amendment, to compel Congress and the president to maintain that constantly varying balance within specific limits if we are to efficiently respond to and control recessions. With super-computers and software architects galore, the mechanics should be a piece of cake. But economists will, as usual, continue to find ways to keep it complicated — you know, job security. Once again, tax earners are the armed forces, public employees at every level, educators, politicians and consultants to the public sector. Taxpayers are exclusively in the private sector. Russ Law, thanks for suggesting that I substitute the words “tax earner” for “tax taker” when referring to the differences between private-sector and public-sector income differences. You may be sure that in the future, should I have the occasion to write on this subject again, I will refer to public employees as tax earners.Now as an aside: Kudos to Chuck Muth for his factual column in the Nov. 2 Appeal entitled: “When it comes to creating jobs, it’s your job.” This is a subject that should have been explored by hundreds of commentators during the past four years. There is no question that able-bodied collectors of 99 weeks of unemployment benefits have become another entitlement culture. Obama and Congress have created a monster. These freeloaders won’t accept available jobs that they consider beneath their dignity, and that goes double for out-of-work college graduates living off mom and dad.• Bob Thomas is a retired high-tech industrialist who later served on the Carson City School Board, the state welfare board, the airport authority and as a state assemblyman. His website is worldclassentrepreneur.com.