August 15, 2019

Would YOU vote to *terminate* the Income Tax tomorrow?

We’re Saying Goodbye to OLD Downsize DC

In that message, I promised to introduce a “FAR OUT” new strategy. Today, I deliver. But it requires the context of a quick story…

Several years back, libertarian heroes Carla Howell and Michael Cloud placed initiatives on the ballot. Twice, they sought to eliminate the state income tax in “Taxachusetts.” In between, they gave the voters a chance to cut the state sales tax in half.

All three initiatives lost. And the reason it happened is why I’m writing to you today.

Every libertarian recognizes that State programs are a raw deal. Some of them are cancerously bad. And none of them can match the potency and social peace offered by voluntary solutions.

Yet the programs ALWAYS grow!

And they grow faster when they fail!

Why? That’s an incredibly important question. I’m glad you asked.

The answer lies in the CAP [Collective Action Problem]…

Concentrated benefits defeats dispersed costs.

It’s a question of motivation. The people who receive taxpayer largess are better organized and funded than the taxpayer’s themselves. In Carla and Michael’s story, it was the Teacher’s Union. The union spent millions to defeat these ballot initiatives.

The unions represented the concentrated benefits side, so they expended tremendous effort to protect their state scheme.

I choose to focus on Michael and Carla’s End the Income Tax proposal because in most cases, the cost and likelihood of success are so low that “rational apathy” sets in. Why bother? But in this case…

Would the taxpayers have saved enough to make it worth it to them to invest in the fight?

Libertarians scream, YES!!!

And therein lies a key difference…

Despite the huge payoff of no income tax bill, the people of Taxachusetts lacked the vision to see what libertarians already understand.

Obviously, Carla and Michael marshaled several impressive arguments to make their case. Yet their case failed to resonate. Why?

Consider a farmer with fantastic seeds. If he has bad soil, his harvest will fail. In this metaphor, impressive arguments are seeds. But the readiness of the public to appreciate these arguments is lacking. The seeds land in infertile soil.

We must enrich and prepare the soil. The public mind must be enriched to comprehend what you and I already grasp.

Downsize DC’s radical new strategy will apply a lesson from price theory. Typically, the cost of an item is key to a buying decision. But many taxpayers don’t seem to know (or care) about the price when there’s a political program is involved. Worse, they fear that their neighbors or the poor will be adversely affected…

It’s up to us. We will show everyone why they’re getting a raw deal from the politicians.

But unlike the clinical analysis of our movement’s think-tank past, we’ll connect with them emotionally. Let’s return to Carla and Michael’s ballot initiatives to show how we’ll do it…

Remember, the teachers union spent millions to defeat them. Why is this detail important?

They were the Concentrated Benefit side of the equation. So what? Is there some significance to that?

The public schools are, first and foremost, a jobs program. Schools not only employ teachers and janitors. They also employ an army of bureaucrats, a union apparatus, and a ton of vendors. There’s a great deal of money at stake.

It’s notable that the teachers union is the entity which so visibly put up the fight. Have you ever seen their contracts?

Earlier this decade, a school teacher told me about a union meeting at an inner-city school district. The union polled its members to rank the ten issues that were most important to the teachers in their upcoming contract negotiations.

Schools are for kids, right? But not one single issue involving educational improvements was included on the list. Instead, all the items were about various employee benefits.

Isn’t it amazing that the children’s needs didn’t even crack the top 10?

Listen, I’m not picking on teachers! I firmly believe that good teachers will ALWAYS have opportunities, even if we completely ended the district, public school model. The kids aren’t gonna disappear! They’ll still need to be educated. And this isn’t about teachers…

The teacher union story isn’t unique. Every State program is a concentrated benefit – a job and/or contracts scheme.


A StatesploitationA scheme where the few benefit at the expense of the many

…usually with inferior results to voluntary alternatives.

So let’s return to Taxachusetts one final time with a theory on why the teachers union defeated Carla and Michael’s end the state income tax ballot initiative, because…

There’s something really significant I want to be sure you don’t miss about this case…

The benefit was so seemingly self-evident, so concrete. Everyone was going to save thousands of dollars per year. It was so clearly in the best interest of the taxpayers (the dispersed) who vastly outnumbered the union members (the concentrated).

Why did the taxpayers act against their own interests?

They still thought *the price MIGHT BE too high*. In other words…

They thought the loss (of schools) was going to exceed their benefit (of money in their pockets).

This is true every time we have this concentrated benefits vs dispersed cost battle.

We libertarians require a strategy that exposes the…

  1. The true high cost of statist schemes
  2. The economical alternative of voluntary action

Downsize DC’s new Statesploitation initiative will address the high cost of state schemes. (We have a plan for the second item too.)

Statesploitation is an unusual word. I made it up! Words are funny. Here’s another really strange word: Lasagna. It’s not pronounced as it’s spelled, and it tells you nothing about what it is. It’s only obvious because you’re familiar with it. No marketing “expert” would’ve invented it.

Still, chances are, your mouth just watered.

Statesploitation has the word “exploitation” at its root, and that’s on purpose. Others have riffed terms like sexploitation and blaxsploitation (Google ’em if you don’t know what they are). The point is, we want everyone in America to learn this word because, once they do, it’ll induce an emotional response…

Someone is taking advantage of us and we can do better!

You or I can blather on all day about how much a given program costs. And if you’ve done that more than once, you know it doesn’t move people. Their eyes glaze as we describe baseline budgeting and the effects a program has on the National Debt. I’ve never seen this approach change a mind.

But being exploited by a political machine? We’re betting that’ll irritate people and reframe the debate on a number of issues.

We will want your help to get everyone in America to learn and even love the word statesploitation. It will take time and effort.

We’ll measure to see how frequently this term is being used.

That’s our plan. We’re not quite ready to start. As I told you in the last message, we have…

  • a new website
  • new “email Congress” software
  • other things to put in place

I also told you, those steps are paid for!

What is not covered is the outreach we’ll need to do in order to be successful. And we need your help to build up that fund.

Invest in Outreach

Thank you for your support,

Jim Babka
Founder & President, Inc.

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One Comment

  1. Charlie
    Posted August 30, 2019 at 12:57 pm | Permalink

    I would like to get rid of state income taxes, and especially property taxes. Communities make enough money to pay for all public needs just from sales taxes, as long as they don’t pay exorbitant salaries to armies of bureaucrats, police, fire fighters, and stop paying for palatial government buildings, police/fire stations, schools, libraries, and fleets of new SUV police vehicles. If they quit using funds in such wasteful ways they could easily pay for all public needs. Of course if we try to vote away all these unnecessary taxes, the sociopaths in charge simply blackmail us into voting for the taxes, by cutting necessary services (instead of firing the useless bureaucrats.)

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