This is what I mean. Let's say you pay $10,000 in income tax with-holdings throughout the year (your employer kindly makes this deduction from your paycheck and sends it to the IRS on your behalf). Now, your total tax bill from income comes to $9,900. BUT, you have to pay the penalty because you didn't floss twice daily or whatever the next big mandate will cover. So, that makes your total tax bill $12400 with the $2500 penalty added. So, with a simple accounting maneuver the IRS can either say you owe a $2400 penalty for not flossing OR they can say, we've applied your $2500 flossing penalty to the $10,000 you've already paid. The balance of $7,500 was applied to your $9,900 in income tax owed. Suddenly you don't owe a $2,400 penalty that the IRS can't prosecute you or garnish you for not paying. You owe $2,400 in income taxes which the law allows them to throw your ass in jail for not paying.
You think it won't happen? Wait. When the Income Tax was first passed it was only going to be a 1-2% tax rate on the top 5% of income earners. This was proclaimed to be all the money our government could possibly need. That has grown of course. It always does. Government found new power. They couldn't help but use it.
When government got the regulatory bug in the early 20th Century corporations saw the usefulness in having Government regulate their industry. By establishing licensing and reporting criteria government could raise the price on entering a new line of business, protecting existing businesses from new competition for marginally profitable industries. AT&T flourished for decades under a licensing scheme established by the government that turned them into a monopoly. Politicians and lack-witted economists called this a natural monopoly. As soon as the monopoly was busted, new competition erupted in the field of telecommunications. This isn't just limited to large corporations like AT&T. In New York, it takes more education and examination to become a barber than it does to become a lawyer. Why? The answer from the politicians is public safety. The real answer is, barriers to competition. The same city tightly controls the number of taxis that are allowed in the city. 1/3 of the number of taxis operate now as did in the 1950's.
People are inherently self-interested. I am a libertarian because I have a desire for true liberty. Politicians are not exempt from being self-interested. It's no surprise that the stock portfolios of congressmen outperform the indexes by a fairly good clip. It's no surprise that businesses are willing to spend millions on political contributions to BOTH sides in an election. Businesses wouldn't spend that money if they didn't get something in return. Let's take RobertsCare (Obamacare no more) for instance. The major insurance companies supported this bill for 2 key reasons. First, it essentially makes it illegal NOT to buy their product. Big win! Second, it puts in budgetary guidelines that make it difficult for new or smaller companies to exist under. There is a requirement that a certain percentage of premiums revenue be applied to coverage payments and only 10% pay salaries, overhead, and profits. For a large insurance company, 10% of billions is plenty of money to operate with. What if a new company wanted to form to compete? Can't happen now. Without the volume that these large companies command, there isn't enough operating margin to satisfy the strict requirements of the law. This is the classic barrier to entry.
Still on RobertsCare. It was also heavily supported by the drug companies. Why? Because it protects their extended intellectual property rights. They get what they want, they donated money to see it get passed.
More to come on this subject.
