Family Feud on taxes

by Rocket Finance

Randall, from CreditWithdrawal, a member of my blogroll that I read often, recently posted a list that he saw on the somewhat popular game show, Family Feud. The question was How do you want your tax money spent? You can read Randall’s comments here. My comments differ from his a little.

#5 Highways and Streets

I think that highways and streets are a relatively good use of tax money, however I would like to see the money go to the states and counties in the form of block grants. In fact, now that our interstate system is in place, all roads should fall under the purview of state and local government. There is more accountablility at that level.

#4 Poor and Needy

Did you know that the Department of Health and Human Services spent more than the Department of Defense? Yet we still have plenty of poor people. . . Randall thinks this is a great use of our tax money and believes that government programs focused on the poor are successful. If only that were true. Our welfare and entitlement system is a huge bureaucracy, filled with waste and does very little to help the poor. Approximately $.28 of every dollar spent on welfare actually reaches someone in poverty. Even the worst charities do a better job than that. Private charities actually do a far better job with greater efficiency and truly help those in need with less money. Governmental policies tend to encourage greater dependence on the government. In fact, some policies actually make it advantageous for single mothers to have children out of wedlock. If the government is involved in programs for the poor at all, it should be local governments that decide how the money is spent.

I don’t understand why Americans assume that the federal government is the Great Problem Solver. We throw our money to Washington D.C. and expect it to come back and help out our neighbor. Great plan.

#3 Healthcare

So, the same government that has bankrupted social security should be put in charge of my health. . . makes sense! Don’t let anyone tell you otherwise - the US has the best healthcare in the world. Our health care system is not perfect, but national healthcare is a disaster. Healthcare does not get any cheaper if we pay the government to take care of us. Furthermore, since our our healthcare system is market driven, it is creative and innovative, we are on the cutting edge of research and development. Universal health care might work to a certain extent in countries like England and France, but only on the backs of drugs and surgical techniques that were developed in countries dominated by free market healthcare. Randall seems to think that Cuba’s healthcare system is superior to that of the US . . . If our system was so bad , why aren’t Americans flying to Cuba to have heart transplants or brain surgery? What was the last miracle drug or cure developed in Castro’s paradise? There are certainly problems with our system, but putting Congress in charge of which doctor I can see cannot be the answer.

#2 My Pocket

This is where our taxes belong. Tax cuts actually increase revenue for the federal government. The tax cuts of the 1980′s resulted in economic growth, just as the tax cut of 2001 grew the economy after the Dot Com recession and the September 11th attacks and even kept the economy strong through hurricane Katrina. None of these events managed to throw our economy off track. Randall believes that our taxes should be used to pay our deficit. What, so we bail out our government so that they can spend even more?

#1 Education

Randall claims that education gets the shaft in our country. I disagree, we spend more per student than any country in the world and the No Child Left Behind Act of 2001 increased spending for education over 40%! Yet there seems to be no discernable improvement in the effectiveness of our education system. Our literacy rates are abysmal, but we are told, “more money, more money, then we will get the job done!” Our country spends over $10,000 per student per year. I have worked in private schools that teach kids to read, write, and think for a third the cost. Why do parents, parents who are already paying for government education, decide to pay for their children to attend a private school?Throwing more money at government education is not the problem. D.C. does not know what is best for the children of my little town. Schools should be funded and administered locally.

I do believe that we should pay taxes. I pay what I owe every year, however, I regret that the majority of it will be wasted. I am certainly in favor of a flat tax or in removing the income tax and instituting a national sales tax.

So on what do I think federal taxes should be spent? Here are my top five:

  1. Defense – the number one priority of the federal government.
  2. Civil defense – protection of the general public.
  3. Government itself – the salaries of government officials.
  4. I can’t think of anything else. . .
  5. Hmmm. . .

Why can’t the federal government reduce debt the same way I do: limiting spending and increasing revenue?

What are your top five priorities for federal government spending?

  1. 21 Responses to “Family Feud on taxes”

  2. By plonkee on Jan 15, 2008 | Reply

    Yes, because Glaxo SmithKline isn’t based in the UK. And Stoke Mandeville hospital isn’t the largest spinal injuries centre in the world. And Great Ormond Street Hospital doesn’t do pioneering work with sick children.

    I thought Americans weren’t actually allowed to visit Cuba – and in any case socialised medicine is generally free to residents, not everyone in the world.

    My top 5 priorities (not necessarily the most money spent though) for British government spending is NHS, Education, Transport, Welfare state, overseas aid. But in the England, we don’t really have a state/federal type divide. What would your priorities be for Wisconsin spending?

  3. By rocketc on Jan 15, 2008 | Reply

    You make some good points – one thing that I did not include in the post – American healthcare is available to all. Hospitals are required to give emergency care to anyone who needs it regardless of their ability to pay. This has also resulted in the closing of good hospitals all along our border with Mexico.

    GSK is a privately held company and much of their research is done in the US. They’re work is outstanding, but they also have a profit-based incentive for the work that they do. GSK does not simply develop new drugs for the good of the residents of the UK. Their website is very clear on this fact.

    Stokes Mandeville is also privately funded and administered. Check out Wikipedia: http://en.wikipedia.org/wiki/Stoke_Mandeville_Hospital

    State spending is a little differents:
    1) Civil defense – police, sheriff, etc.
    2) Emergency services – disaster and freeways
    3) Legistlature and court system
    4) Resources management – flora and fauna management
    5) Not sure. . . there might be something else.

  4. By Randall on Jan 15, 2008 | Reply

    Wow, I mean WOW. I feel like I’ve been bitch-slapped by the entire GOP.

    The gauntlet has DEFINITELY been thrown down.

  5. By rocketc on Jan 15, 2008 | Reply

    I’m actually not a huge fan of the GOP at the moment. :) But I’m really a nice guy. . . no slapping. . .just have a few points of view.

  6. By Randall on Jan 15, 2008 | Reply

    Let the Smackdown Begin

    http://www.creditwithdrawal.com/2008/01/15/family-feud-on-taxes-my-shot-at-rocket/

  7. By Lynnae @ beingfrugal.net on Jan 15, 2008 | Reply

    I have to say I’m with rocket on this one. It seems to me that everything the government gets it’s little hands on ends up not working well and is more expensive than it should be.

  8. By Becky on Jan 15, 2008 | Reply

    Rocket,
    I really agree with your thoughts on these topics. Like Lynnae said, it does seem the government does a better job at screwing things up than making them better. I don’t know that Defense would make my top five. In fact, I’m not sure what would! Definitely not the IRS, I like the Fair Tax :)

  9. By plonkee on Jan 15, 2008 | Reply

    Stoke Mandeville hospital is not privately funded or adminstered, it is NHS funded. Private Finance Initiatives (PFIs) for building works mean that private companies take on the risk of building a large scheme and the government pays them to do so. Some are successful, some aren’t.

    I didn’t say that GSK were a non-profit organisation, but if you consider that getting approval for your drug to be precribed by the NHS means that the world’s 4 largest organisation by employees will be giving you money, I think they might be inclined to sell to them.

  10. By plonkee on Jan 15, 2008 | Reply

    Back to being more polite. I think it’s interesting that you pick up resource management. I think that’s normally an underfunded/unglamorous area, and a pretty good way for government (at the appropriate scale) to spend it’s money.

  11. By rocketc on Jan 15, 2008 | Reply

    I always try to be polite. I say everything in a relaxed manner. :) Stoke Mandeville and GSK are both for-profit companies. Especially GSK. There may be some set-up in the UK where they recieve government funding, but the forces that have propelled them to the top of their fields are most definitely market based.

    That said I don’t want to get too sidetracked by a US v UK debate. One thing to keep in mind is that the US and Europe are very different geographically. I think this is a mistake that US liberals make when they compare the governments of the Europe to our own central government.

    Who knows best how to care for the children of Indiana or California or Maine? I say it is not Washington D.C.

  12. By rocketc on Jan 16, 2008 | Reply

    More to come on Thursday.

  13. By deepali on Jan 17, 2008 | Reply

    It’s questionable whether we have the best health care system in the world (I will argue that we don’t). But we definitely have the most expensive. Which is nuts, considering how many people don’t actually GET health care in this country (ie, the uninsured and underinsured).

    Hospitals are not required to treat anyone. EDs are required to treat anyone with a life-threatening condition, to the point of stabilization. Then they drop the poor uninsured folks off at the homeless shelter.

    And health care should not be tied to drug development – that’s part of the problem. Also, our government actually does quite a bit of the funding for new drugs. Which helps explain where some of HHS’s money is going…

    As for why people aren’t going to Cuba for health care? They can’t – it’s a unwieldy process to get approval to go. Instead, they go to Canada for drugs, India for procedures, and Mexico for care.

    I do not think highways and streets are a good use of money. I’d rather see more going towards mass transit and rail. I’d like to see highways get privatized and tolls applied. But, I’m also about to get rid of my car. :)

  14. By rocketc on Jan 17, 2008 | Reply

    Mass transit only works in places where the population is very dense – New York, Chicago, Europe, etc. It has been tried many times, but people still end up needing a car to get to the train station. We have a passenger rail system in the US – Amtrack – it doesn’t have enough stations in enough places to be useful and it is just as expensive as driving (once you figure cab fare to get from the station to where you really want to go) despite incredibly large taxpayer subsidies – $117 per rider last year. http://www.heritage.org/Research/Budget/bg2072.cfm

  15. By rocketc on Jan 17, 2008 | Reply

    Another great idea by our all-wise federal government who we desperately want to entrust with the resposibility of making our healthcare better and cheaper.

    I can’t wait.

  16. By deepali on Jan 18, 2008 | Reply

    Ah, but in Europe, petrol prices are higher, making it more economical for people to use mass transit (hence demand drives supply). When our gas prices kick up past $5/gal, mass transit (and rail) will seem more appealing. We can help that along by taxing the crap out of petroleum. It will have the added benefit of ending “foreign dependence” as well.

    The externalities of transit and rail are lower (and cheaper) as well. The problem with cost analysis from places like Heritage (not exactly an unbiased source) is that their “economists” don’t actually use good economics.

    Our government is actually the biggest reason why our health care system is so good. Without government funding, etc, we wouldn’t have innovation in the areas we need it. And *because* of government involvement, we actually have some concern for prevention, which is the driver behind why health care is cheaper (and conceivably better) in other countries.

  17. By deepali on Jan 18, 2008 | Reply

    Did I just double post? Sorry about that. But I do want to address something else you said – I agree that the states spend better than the feds. I would LOVE if my “state” (I live in the District) were actually allowed to make it’s own spending decisions. Now that we have a decent mayor, anyway. :)

    I believe in “more” (or rather, better) spending in education, health, transit (including highways), etc, on the federal level, but actual implementation on the state level. But I also believe in less spending on useless foreign wars. I’d rather see some of that money redirected to foreign aid (which does more for the “war on terror” than invasions).

    I would also (and I’ll probably piss someone off by saying this) like to see the government raise revenue by taxing certain goods, not necessarily by increasing income tax.

  18. By rocketc on Jan 18, 2008 | Reply

    I disagree with you about gasoline prices, you would see a great economic slowdown if gas increases in price any more. We are too spread out in this country – especially out west.

    I agree about better spending on education,etc., my view is that the federal government can’t spend efficiently on domestic problems.

    I think the best thing for our economy would be a flat 15% (no deductions) tax rate across the board and a national sales tax. Similar to what Ireland has done.

  1. 4 Trackback(s)

  2. Jan 15, 2008: Family Feud on Taxes - My Shot at Rocket | Credit Withdrawal - Helping You Kick the Credit Habit
  3. Jan 16, 2008: Carnivals, a Festival, and Fireworks | beingfrugal.net
  4. Jan 17, 2008: Something extra: Lincoln's view | rocket finance
  5. Jan 20, 2008: Recommended Readings for 1/20/08 | Millionaire Money Habits

Sorry, comments for this entry are closed at this time.