Posts tagged conservative

Tax Consumers, Taxpayers, and the Cox Box





Tax Consumers, Taxpayers, and the Cox Box


6664Years ago I joked that every economist’s 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 Phillip’s Curve, the Laffer Curve, Rothbard’s Law, Buridan’s Ass, Mises’s Butler, Hume’s Specie-Flow Mechanism, Rostow’s Stages of Growth, the Ricardo Effect, Menger’s Law, the Beveridge Curve, and Hayek’s 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:


Figure 2: The conservative view.

Conservatives, however, tend to overlook the money that so many higher-income earners receive from their crony capitalist connections within government. So, firms such as General Motors do earn their revenues from willing customers but also have enjoyed taxpayer-financed bailouts and protection from their potential competitors through various regulations.

Left liberals believe that the appropriate depiction is best explained in Figure 3, as they largely believe that higher income earners don’t pay their “fair share” of all taxes (not just income taxes) while receiving vast benefits in return. Meanwhile, the welfare recipients pay substantial taxes (not just income taxes), while receiving a pittance in return compared to their better-connected higher-income earners. Higher-income earners such as General Motors stockholders and executives are subsidized with resources not bestowed on lower-income earners:


Figure 3: The left-liberal view.

Libertarians in contrast favor Figure 4 with higher-income earners using their political connections to arrange money flows to themselves. At the same time, ideological pressures result in a political buying off of the desperate lower income groups who have been shut out of opportunities to better their circumstances via licensing costs, minimum wages, regulations and more.


Figure 4: The libertarian view of tax consumers.

Libertarians in particular see a troubling drift over time to the left of the diagram as net taxpayers are increasingly outnumbered by net tax consumers. As Mises pointed out in Bureaucracy, this will eventually lead to the destruction of the economic system.

Cox Box analysis will reveal a different mix of taxpayers and consumers at different income and wealth levels in different societies, times, and places. In the modern United States, however, we find an economy in which those at the income extremes appear to most easily take advantage of taxpayer-funded benefits while those at the middle income levels are increasingly called upon to finance the expenditures. Moreover, libertarians see the country as being transformed from a society of free individuals voluntarily interacting with one another into a heavily-politicized society wherein the government is involved — by various means — in virtually every facet of life.


About the Author

Jim Cox
Jim Cox is an associate professor of economics and political science at Georgis Perimeter College and the author of The Concise Guide to Economics, Minimum Wage, Maximum Damage, and most recently, The Haiku Economist.


Image credit:


Why John Boehner And Paul Ryan Should Immediately Resign




By Michael Snyder

Why John Boehner And Paul Ryan Should Immediately Resign


U.S.-Capitol-Photo-by-Lance-Cheung2-300x300Thomas Jefferson once said that “the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.”  In other words, he believed that government debt was the equivalent of stealing money from future generations on a massive scale.  Right now, the U.S. government is stealing roughly $100,000,000 from future generations of Americans every single hour of every single day.  And it is being projected that the U.S. national debt will more than double during the 8 years of the Obama administration.  In other words, the federal government will pile more debt on to the backs of our children and our grandchildren during the Obama years than had been accumulated during all of the rest of U.S. history combined.  The federal government is literally destroying the future of America, and what we are doing to our children and our grandchildren is beyond criminal.  If there was one thing that the Republicans in Congress were supposed to do, it was to do something about all of this debt.  These days Republicans can’t seem to agree on much, but the one issue that virtually all “conservatives” were supposed to agree on was the national debt.  The American people gave the Republicans control of the House in 2010 and 2012 for a reason.  Unfortunately, nothing has been done.  Our debt has continued to spiral out of control and now John Boehner and Paul Ryan are pushing a “budget deal” that will essentially give the free-spending Democrats virtually everything that they want for the next 10 years.  That is why John Boehner and Paul Ryan should immediately resign.

This “budget deal” actually increases the deficit in the short-term.

Yes, you read that correctly.

Overall, it is supposed to reduce the federal budget deficit by about 20 billion dollars over the next decade.  But even if the unrealistic assumptions that those numbers are based upon end up working out (which they never do), the “savings” will average just 2 billion dollars a year over the next decade.

And considering the fact that federal budget deficits will likely average well over a trillion dollars over that time span, that is a complete and total joke.

It is kind of like spitting into Niagara Falls and thinking that it will actually make a difference.

Even Paul Ryan is admitting that “this isn’t the greatest agreement of all time”, and in interviews he is complaining that the Democrats wouldn’t allow him to do more.

As if we are supposed to feel sorry for him.

Look – according to the U.S. Constitution the federal government cannot spend a single penny without the approval of the U.S. House of Representatives.

The Democrats cannot force the Republicans to do anything.

So if the national debt more than doubles during the Obama administration it is the fault of both the Democrats and the Republicans.

Today, U.S. Senator Rand Paul called the proposed budget deal “shameful“, and he was exactly correct.

It is utterly shameful that the Republicans believe that it is just fine to steal more than 10 trillion dollars from future generations of Americans during the Obama years.

It is utterly shameful that the Republicans believe that it is just fine that the U.S. government has accumulated more than 200 trillion dollars of unfunded liabilities that will need to be paid in future years.

It is utterly shameful that the Republicans believe that it is just fine to keep running up a debt that is now more than 37 times larger than it was just 40 years ago.

But instead of doing something to fix this, House Speaker John Boehner is blasting those that are concerned about all of this debt

House Speaker John Boehner, R-Ohio, who ceded control of the budget talks to Ryan, likewise pushed back on outside groups’ attempts to influence lawmakers. “They’re using our members, and they’re using the American people for their own goals,” Boehner said, “This is ridiculous. Listen, if you’re for more deficit reduction, you’re for this agreement.”

The Democrats don’t even have to attack fiscal conservatives anymore because the Republican leadership is taking care of that job for them.

And John Boehner has got to be joking when he uses the phrase “deficit reduction” in relation to this proposed budget deal.  In fact, even CNN is admitting that it essentially does nothing to help our long-term debt problems…

It doesn’t really move the needle much on the country’s long-term debt trajectory. That’s because Ryan and Murray opted for pragmatism, explicitly ruling out wrestling over entitlement and tax reform in this round of negotiations.

Back on September 30th, 2012 our national debt was sitting at a total of 16.07 trillion dollars.

Today, it is up to 17.23 trillion dollars.

That means that we have added 1.16 trillion dollars to the national debt in a little more than 14 months.

This is a recipe for national suicide.

We were the wealthiest nation in the history of the planet, but that was never good enough for us.

We always had to spend even more.

Now we have accumulated the greatest mountain of debt the world has ever seen, and someday if our children and our grandchildren have the chance they will curse us for what we have done to them.

Anyone that has run up massive amounts of credit card debt knows that the ride up can be quite enjoyable.  At times, it can seem like the good times will go on forever and that there will never really be any consequences.

But in the end, a very painful day of reckoning always arrives.

The rest of the world is watching what is going on.  They can see us running up all this debt.  The can see the Federal Reserve wildly printing up money.

At some point the rest of the world is going to stop using our increasingly unstable currency to trade with one another and they are going to stop lending us trillions of dollars at super low interest rates.

When that time arrives, the consequences of decades of very foolish decisions will catch up to us very rapidly.

If only we had listened to our forefathers.

Thomas Jefferson once said that if he could add just one more amendment to the U.S. Constitution it would be a complete ban on all borrowing by the federal government

I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.

How much better off would we be today if we had only listened to him?











This article first appeared here at the The American Dream.  Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here

Image credit:


U.S. Chamber cavalry arrives to help Mitch McConnell





U.S. Chamber cavalry arrives to help Mitch McConnell




The US Chamber says that McConnell is a “true conservative.”

I suppose, if securing a $3 billion earmark so that Senator Reid could declare victory (but oh so short lived) in the government shutdown is “conservative.”

And don’t forget completely wussing out on the debt ceiling deal. Very conservative.

This is Karl Rove and company here. This is the establishment thinking that the GOP might just win the Senate and they don’t want to lose a Senator who would become the Leader. The Chamber and much of the establishment need someone who will set an agenda in the Senate commensurate with their interests. God forbid McConnell be deposed by some small government Tea Party cretin.

Even if McConnell were to be primaried the establishment need not fear losing control completely in the Senate. Next in line for GOP leader is John Cornyn, a Bush guy.

But it would be an embarrassing blow and the Chamber has had quite enough embarrassment from the GOP caucus on the other side of the Capitol thank you very much.

(From The Washington Examiner)

“The people of Kentucky have a true conservative champion for American free enterprise in Senator Mitch McConnell. McConnell has a 92 percent lifetime score with the U.S. Chamber. We appreciate his efforts to fight back against the war on coal, and to protect Kentucky jobs from the harmful policies coming from Washington, D.C.,” said Chamber National Political Director Rob Engstrom.

Click here for the article.

Image credit:

Nick Sorrentino
About Nick Sorrentino

Nick Sorrentino is the co-founder and editor of A political and communications consultant with clients across the political spectrum, he lives just outside of Washington DC where he can keep an eye on Leviathan.



Matt Drudge says “It’s now Authoritarian vs. Libertarian.”




Posted September 3, 2013

Matt Drudge Breaks Up With Republicans, Joins Libertarians


Matt Drudge, the founder of the enormously popular conservative news aggregator, tweeted today that since there are no real differences between Democrats and Republicans the only two real political parties are Authoritarians and Libertarians.

“It’s now Authoritarian vs Libertarian,” Drudge tweeted. “Since Democrats vs. Republicans has been obliterated, no real difference between parties…”

Drudge also asks his followers why anyone would still vote Republican. “Who are they?!” he asks. “Raised taxes; marching us off to war again; approves more NSA snooping.”


drudge (550 x 393)
Is this a turning point for conservative politics? Is the Liberty Movement of peace and privacy set to be catapulted into the mainstream?

“Small government conservative” lawmakers who directly benefit from farm subsidies




“Small government conservative” lawmakers who directly benefit from farm subsidies


 ”Stephen brings his personal experience as a successful businessman running a large agriculture operation to Washington D.C. and understands, firsthand, that jobs are not created by Washington bureaucrats, but rather by hard-working folks in Tennessee.  He is committed to taking every possible step to empower people to invest and create jobs, cut government spending and make Washington more accountable to taxpayers.

- This is from the website of Representative Stephen Fincher of Tennessee who according to the attached article received the most agriculture subsidies of any member of Congress in 2012, $70,574.

If he really wanted to reduce the burden to taxpayers he could give that $70K back I suppose.

Many a rural Republican will go on and on about our need to reduce the size of government, and why we need to end waste and abuse in the District of Columbia. Some even talk about how crony capitalism is wrong.

Many of these same lawmakers however pony right up to the taxpayer funded trough when it comes time to hand out corn, sugar, or milk subsidies. These subsidies cost billions and billions of dollars.



Related post:

Tennessee Congressman Got Farm Subsidies, Denounces Food Stamps

If it’s a “states’ rights” issue, why are they asking permission from the federal government? (Internet Sales Tax)


If it’s a “states’ rights” issue, why are they asking permission from the federal government?Source:

By Tona

For many months now, “limited government, free market, reduced spending, Conservative Republicans™” Lamar Alexander, Bob Corker and Bill Haslam have been lobbying for and/or sponsoring the Marketplace Fairness Act, also known by a more appropriate title: the Internet Sales Tax. The tax-raising Republicans have been touting this as the states collecting taxes “that were already theirs”, or “making it fair for the brick-and-mortar businesses located in the state”, or “restoring state sovereignty” as if this is some sort of 10th Amendment takeback from the federal government – when in reality it is just a tax increase. Their appeal to the currently popular anti-federal sentiment in the country is not only unconvincing, it is without constitutional merit. Note that they are counting you as fools to fall for this “states’ rights” language.

If these leaders truly believed in “marketplace fairness” for brick-and-mortar stores, then Tennessee would not have cut the sweetheart deal with online retailer and corporate welfare queen Amazon to locate here and not collect any sales taxes – even for sales within the state. How’s that for an unfair advantage? Nobody argues that a sale made within the state isn’t subject to state sales taxes – except for our state government and Amazon, who enjoys an unfair advantage over all the other brick-and-mortar retailers in Tennessee thanks to Governor Haslam who now claims to be interested in “marketplace fairness”. Amazon also received a 10-year, 50% tax break on property taxes to locate in Loudon County. Apparently tax revenue (or is that “fairness”?) is for sale to the highest bidder. We don’t need a new federal law to correct that.

Article 1, Section 9 of the U.S. Constitution states in part:

“No tax or duty shall be laid on articles exported from any state.”

The federal government cannot issue a federal tax on interstate sales. They are exports, whether to another state or another country. The federal government can however regulate interstate “commerce” or transportation of the goods between states. The states themselves do not have this power over one another. They cannot regulate interstate trade period – which is precisely why sales taxes for purchases you made in another state have not been collected. They are exports to your resident state. So the money-grubbers in the state created the “use” tax to take some of your money anyway – despite the fact that they provide zero services to the brick-and-mortar store in the other state you imported from and your “use” of the item you purchased doesn’t induce any burden on your neighbors that require additional tax revenue that isn’t covered somewhere else by another tax.

So why ask permission from the federal government? Because they have to. Article 1, Section 10 of the U.S. Constitution states in part:

No state shall, without the consent of the Congress, lay any imposts or duties on imports or exports, except what may be absolutely necessary for executing its inspection laws: and the net produce of all duties and imposts, laid by any state on imports or exports, shall be for the use of the treasury of the United States; and all such laws shall be subject to the revision and control of the Congress.”

So guess what? The states are only entitled to collecting their new Internet Sales Tax and subtracting their expenses for executing inspections of these imports/exports. The rest of the revenue is required by the U.S. Constitution to go to the U.S. Treasury. At best, Tennessee could add more cigarette gestapo agents to the state Department of Revenue. The net revenue proceeds to the states legally should be ZERO, because see, the founders really did believe in some semblance of free trade and INDEPENDENT states.

There is no “state right” to this money. There never was.

How To Vote Or To Not Vote?



My friend Sherrie posted regarding not voting to send a message.  I read numerous replies and felt the need to input some additional thoughts I had after reading comments exalting both Ryan and Johnson.  I am sharing this to simply answer a few questions asked regarding my thoughts this past week.

Great post Sherrie, whether I agree as most times or disagree as this time.

Firstly, anyone thinking Ryan is a “conservative” either gains all their information at the receiving end of a TV remote control or does not understand the meaning of the word.

Secondly, anyone thinking that Gary Johnson is a Ron Paul clone has been spoon fed a few selected videos and have not taken the time to do the homework.  Johnson would not be controlled by Goldman Sachs as are Obama and Romney, but he would be manipulated by lobbyists despite his perceived adherence to the Constitution.  Between Obama, Romney and Johnson there should be no doubt that Johnson would be the lesser of three evils.

Finally, what should us disenfranchised voters do?  Write in Dr. Paul, choose Johnson or others running third party or just place a vote of no confidence by not voting?  We are disenfranchised because unlike the sheep, we will not allow the wool to be pulled over our eyes.  We see reality, and it is ugly!  The disenfranchised voters can make a statement by their vote only if we come together in synergy and speak as one voice.  Personally my plans are to write in Dr. Paul.  Either way, we all have a voice, but unless we speak in harmony, in whatever direction that may be, our individual voices will never be heard.  Should we choose to do nothing there will be nothing to hear.

Please feel free to let me know your thoughts as we decide our steps forward by entering a comment below.

Ron Paul supporters photobomb Mitt Romney’s visit to Poland




Ron Paul supporters photobomb Mitt Romney’s visit to Poland  Read more:

Ron Paul banner seen from Romney’s motorcade in Gdansk (Photo: Bonney Kapp/Twitter).
Read more:

Mitt Romney was greeted by Polish supporters of Texas Rep. Ron Paul as his motorcade passed through Gdansk on Monday. Volunteers from the Romney campaign struggled in vain to use umbrellas to block a large Ron Paul banner from sight, Bonney Kapp of CBS News reports.

The Paul supporters’ sign read, “Polish Choice – Ron Paul Kongres Nowej Prawicy.”  Kongres Nowej Prawicy stands for “Congress of the New Right” and is the name of a libertarian-conservative Polish political party founded last year.

A July 28 posting on the party’s website called for displaying a banner in support of Ron Paul during Romney’s visit. The post explains that the party believes Paul would be a better choice for the GOP.


Ron Paul is Becoming Something More Important Than President

YouTube Preview Image

Published on Jun 8, 2012 by

Why Ron Paul conceding he won’t be president and Rand Paul supporting the presumptive GOP nominee are but trivial anecdotes to the obvious and ongoing success of the most transformative political movement of our time: The rEVOLution.

House passes Homeland Security bill with meaningless anti-abortion rider



By Muriel Kane

House passes Homeland Security bill with meaningless anti-abortion rider, TSA, ICE

Photo: Gage Skidmore, via Wikimedia Commons.


Republicans in the House of Representatives attached an anti-abortion rider to a Homeland Security spending bill Thursday. The provision would do nothing to change existing policy and is unlikely to make it past the Senate, but it is seen as sending an election-year message to the lawmakers’ conservative constituents.

In what was probably not intended as a deliberate rebuke to Republican president candidate Mitt Romney, the Homeland Security bill caters to state and local governments by increasing funding for first responders like police and fire departments, while cutting funds from the widely unpopular Transportation Security Administration.

The anti-abortion rider, proposed by an Alabama Republican, would prevent Immigrations and Customs Enforcement (ICE) from funding abortions for illegal immigrants in its custody, except in cases of rape, incest, or threats to the life of the mother. It passed on a party-line vote, 234 to 182.


Go to Top