Tax By Proxy

09/11/2009

Cliched, I know, but I think we should start out with this:

tax
–noun

1. a sum of money demanded by a government for its support or for specific facilities or services, levied upon incomes, property, sales, etc.
2. a burdensome charge, obligation, duty, or demand.

The government requires me to pay them a certain portion of money so they can spend it on things that (purportedly) benefit me.  Yet when they require that I buy auto insurance or face a fine, how is that not a tax?  If they were to require me to buy health insurance or face a fine, how is that not a tax?  Any proposal or law that requires me to pay a private, for profit company money is incredibly suspect in my mind.  Am I supposed to believe that the lawmakers chose a company or an industry out of a hat to receive my money? 

Case in point: here in Illinois, if you are convicted of a DUI in Illinois, you have to have an engine interlock system installed on your vehicle, and there’s only one company that provides it.  The installation of a system has a cost of over $1000.  You also have to pay a monthly monitoring fee to the tune of over $200 for at least a year.  So, for each new DUI issued, the company providing this service is guaranteed $3500.  Do you believe that this company idly sat by and waited for the legislature to realize the wisdom of such a law, or do you think they might have had some important ears bent and key palms greased? 

This isn’t an exact comparison to the mandate for auto insurance or the proposal health insurance mandate.  But it helps to demonstrate a point.  The government is in a unique position of being able to require you to pay money both to itself and to outside parties.  Regardless of where the money goes, if the government requires you to pay money, I consider it a tax.  When it goes to a third party, I consider it to be a tax by proxy.  

The problem with a tax by proxy is that I have no say in how that money is used, and someone is making a profit from my government mandated payment.  With a regular tax, I have a Constitutionally protected say in what happens through my participation in the election process. A tax by proxy goes to a private company run by shareholders, of which I am not one, nor do I forsee myself becoming one anytime soon.  And after requiring I pay this private company, often the government ends up stepping in and setting up rules to ensure the private company does their job and doesn’t just soak their hostage customers. 

Again, I ask, why is this system preferable? How is it that money paid to private companies magically produces better results?  Why in the world would I want to support a political party  that wants to make sure my money goes to private companies that they continually relax regulations on?  How is that in my best interest?

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