Shoplifting as Governance

by Russ Roberts on January 19, 2006

in Politics

In this very nice piece, George Will looks at the Maryland’s General Assembly’s recent mugging of Wal-Mart. 

This is part of the tawdry drama of state politics as governments
grasp for novel sources of money. Forty-eight states are to varying
degrees dependent on revenue from gambling. Forty-six states are
addicted to their cut, to be paid out over decades, from the $246
billion coerced from the tobacco industry by using the specious
argument that smoking costs their governments huge sums. As a result,
46 states have a stake in the long-term profitability of tobacco
companies.

Maryland’s grasping for Wal-Mart’s revenue opens a new
chapter in the degeneracy of state governments that are eager to spend
more money than they have the nerve to collect straightforwardly in
taxes. Fortunately, as labor unions and allied rent-seekers in 30 or so
other states contemplate mimicking Maryland, Wal-Mart can contemplate
an advantage of federalism.

States engage in "entrepreneurial
federalism," competing to be especially attractive to businesses. A
Wal-Mart distribution center, creating at least 800 jobs, that has been
planned for Maryland could be located instead in more hospitable
Delaware.

Meanwhile, people who are disgusted — and properly so
— about corruption inside the Beltway should ask themselves this: Is
it really worse than the kind of rent-seeking, and theft tarted up as
compassion, just witnessed 20 miles east of the Beltway, in Annapolis?

The first part of the piece has some very thoughtful analysis of rent-seeking and the Founders worries about it.

If the legislature wants to give money or health care to poor people, it should raise taxes and make the people who elect the officials sanction it via elections.  Taxing Wal-Mart’s customers and stockholders is the wrong route for a democracy.  The title of Will’s article, "Shoplifting as Governance," says it eloquently.

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