They always sound so reasonable, those who advocate taxing business and/or income for the sake of funding education. Their motives seem so pure. What they advocate does say a lot about their motives. Problem is, what it says is not good.
Education, we are constantly told, is the great equalizer. It is key to opening opportunity for all. Education is about preparing children for adulthood and responsibility. What we hear more often though is that education is about preparing students to compete in a global economy for the sake of future prosperity. In other words, for its loudest advocates, government education is all about jobs, productivity, careers, and living the good life.
But wait – what is that we are taxing? The very job, business and “good life” opportunities public education is supposed to produce!
A well-known economic principle is that you get less of what you tax. So, how can someone claim to be for jobs and business opportunities on the one hand, but reduce them on the other?
It’s not rocket science to see a contradiction here. As an example of just how contradictory this is, consider Ohio and its basket-case economy. Thirty years ago that state ranked with Texas as one of the best states to live in for the sake of holding on to one’s hard-earned money. Then, Ohio instituted an income tax.
Today, Ohio college students, undoubtedly well-educated with lots of economic opportunity tax dollars, load up on buses for out-of-state job interview trips. Now taxed out of existence, the prosperity-producing economic opportunities are no longer in Ohio.
Lots of countries have practiced the “taxation of prosperity for prosperity’s sake” model. China, the former Soviet Union, and various east European countries are among the best examples. Present-day Germany, with its 12-plus percent unemployment rate, comes to mind as well.
The taxation for education crowd would have us believe they are all about opportunity, but they would tax the very opportunity they claim they want to create through education.
They are not about opportunity at all. They are simply about control. They, like Plato, fancy themselves the all-knowing philosopher-kings who know what is best for the rest of us.
Business and income taxes are a very convenient means to mold the economy. Centralized education systems are a convenient means to mold minds.
The taxation for education crowd sees taxes and education as opportunities to continue the status quo at price costlier than they even realize. They may do this with the best of intentions, but intentions don’t create jobs and prosperity.
Winston Churchhill once said to believe we can tax ourselves into prosperity “is like a man standing in a bucket and trying to lift himself up by the handle.” Low taxes alone do not guarantee future jobs (regulatory structures, tort system, etc., all play a role in the business climate). But high taxes can absolutely prevent those jobs from being created.
We must safeguard our children’s future economy, otherwise there is very little reason to prepare them for anything academically.
Byron Schlomach, Ph.D., is the chief economist at the Texas Public Policy Foundation, a non-profit, non-partisan research institute based in Austin.