By Michael Kleen
July 11, 2012
Rock River Times
In this column, I will tackle two subjects: state and federal grants, and Prof. John Kindt’s guest column on Illinois gambling taxation in last week’s issue of the Rock River Times. Both of these subjects nicely illustrate the difference between advocates for bigger government and advocates for smaller government when it comes to the relationship between government and wealth.
Advocates for bigger government believe that the money you earn, whether it be through wages or income from a business, does not belong to you. In other words, government, be it state, local, or federal, should take what it needs from you first, and then you get to keep whatever is left. They believe that politicians and other government officials know what is best for you and will spend accordingly.
Advocates for smaller government, on the other hand, believe that every dollar you earn is yours first and foremost. When you give some of it to the government, you are expecting that it be spent frugally and wisely on a limited number of basic services. They believe that, although you are not perfect, ultimately decisions about how to spend your money should be left to you.
Consider government grants. This is money given by the state or federal government for some purpose that the recipient does not have to pay back. Lately, several million dollars in “economic development” grant money has been given by the State of Illinois to Rockford-area agencies. This grant money is not, as some seem to believe, “manna from Heaven.” It came from the tax dollars that we pay to the State of Illinois. Currently, Illinois has about $5-7 billion (give or take) in unpaid bills and unfunded liabilities. Every dollar the state gives away in grant money is a dollar that is not going to pay those bills.
Furthermore, once the grant-funded projects are completed, someone has to pay to maintain them. And that is assuming the grant is enough to cover all of the construction costs. From where do you think that money will come? Local government will cry that budgets are stretched to the breaking point and either your taxes will be raised, or funding will have to come out of other areas of the budget. That is how we end up paying for this “gift from above.”
Advocates for bigger government see no problem with this, however, because they believe that government can never run out of money. When the need arises, it can simply take whatever it wants from you or your business to cover the holes in its budgets. Advocates for smaller government, on the other hand, believe, at the very least, government should take care of all its bills and liabilities first before taking on any new projects and expenses.
If you think I am exaggerating when I describe the mentality of big-government advocates, look no further than Prof. John Kindt’s guest column in last week’s issue of the Rock River Times. Prof. Kindt’s very first assertion is that Illinois would have a balanced budget today if not for the billions of dollars “given away” to Illinois gambling interests.
How was that money “given away”? The State of Illinois allowed casinos to keep more of their profit by not taxing them as much. Read that sentence again very carefully. You see, according to this logic, the amount of profit a business makes is at the mercy of the state. If your taxes are low, it is because the state has decided to give you a gift. After all, it could take everything if it wanted.
And that is exactly what Prof. Kindt argues. Illinois should simply take 100 percent of a casino’s profit in order to pay its bills. Why not? He asks. You see, when a privately-owned casino makes a profit, it is exploiting the poor and vulnerable. When it is providing revenue for the state, however, that makes it acceptable; even desirable.
So here we have two different ways to look at government and wealth. On one hand, we have people who believe we work to provide the government with revenue to fund the dreams and desires of policymakers and politicians. On the other hand, we have people who believe we work to take care of ourselves and our families, to fulfill our own dreams and desires, and that policymakers and politicians come last.
The better you understand this divide, the better equipped you will be to demand that government lower taxes and reign in spending. The government is full of people who believe your wealth belongs to them and that they know what is best for you. They do not believe in limits to government spending, and they will never live within their means if left to their own devices.