Free To Choose: a personal Statement

The Tide ls Turning
289
Pat Brennan is expressing a natural human response to the
attempt by other people to control her life when she thinks it's
none of their business. The first reaction is resentment; the second
is to attempt to get around obstacles by legal means; finally, there
comes a decline in respect for law in general. This final conse-
quence is deplorable but inevitable.
A striking example is what has happened in Great Britain in
reaction to confiscatory taxes. Says a British authority, Graham
Turner:
I think that it's perfectly fair to say that we have become in the
course of the last ten or fifteen years a nation of fiddlers.
How do they do it? They do it in a colossal variety of ways. Let's
take it right at the lowest level. Take a small grocer in a country
area, . . . how does he make money? He finds out that by buying
through regular wholesalers he's always got to use invoices, but if he
goes to the Cash and Carry and buys his goods from there, . . . the
profit margin on those goods can be untaxed because the tax in-
spectors simply don't know that he's had those goods. That's the way
he does it.
Then if you take it at the top end—if you take a company director
well, there are all kinds of ways that they can do it. They buy their
food through the company, they have their holidays on the company,
they put their wives as company directors even though they never
visit the factory. They build their houses on the company by a very
si mple device of building a factory at the same time as a house.
It goes absolutely right through the range, from the ordinary work-
ing-class person doing quite menial jobs, right to the top end—busi-
nessmen, senior politicians, members of the Cabinet, members of the
Shadow Cabinet--they all do it.
I think almost everybody now feels that the tax system is basically
unfair, and everybody who can, tries to find a way round that tax
system. Now once there's a consensus that a tax system is unfair, the
country in effect becomes a kind of conspiracy
and everybody helps
each other to fiddle.
You've no difficulty fiddling in this country because other people
actually want to help you. Now fifteen years ago that would have been
quite different. People would have said, hey, this is not quite as it
should be.
Or consider this, from an article in the Wall Street Journal by
Melvyn B. Krauss on "The Swedish Tax Revolt" (February 1,
1979, p.
18) :

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290
FREE TO CHOOSE: A Personal Statement
The Swedish revolution against the highest taxes in the West is
based on individual initiative. Instead of relying on politicians, ordi-
nary Swedes have taken matters into their own hands and simply
refuse to pay. This can he done in several ways, many of them
legal. . . .
One way a Swede refuses to pay taxes is by working less. . . .
Swedes sailing in Stockholm's beautiful archipelago vividly illustrate
the country's quiet tax revolution.
The Swedes escape tax by doing-it-themselves. . . .
Barter is another way Swedes resist high taxes. To entice a Swedish
dentist off the tennis court and into his office is no easy matter. But
a lawyer with a toothache has a chance. The lawyer can offer legal
services in return for dental services. Bartering saves the dentist two
taxes: his own income tax plus the tax on the lawyer's fees. Though
barter is supposed to be a sign of a primitive economy, high Swedish
taxes have made it a popular way of doing business in the welfare
state, particularly in the professions. . . .
The tax revolution in Sweden is not a rich man's revolution. It is
taking place at all income levels. . . .
The Swedish welfare state is in a dilemma. Its ideology pushes for
more and more government spending. . . . But its citizens reach a
saturation point after which further tax increases are resisted. . . .
the only ways Swedes can resist the higher taxes is by acting in ways
detrimental to the economy. Rising public expenditures thereby un-
dercut the economic base upon which the welfare economy depends.
WHY SPECIAL INTERESTS PREVAIL
If the cresting of the tide toward Fabian socialism and New Deal
liberalism is to be followed by a move toward a freer society and
a more limited government rather than toward a totalitarian so-
ciety, the public must not only recognize the defects of the present
situation but also how it has come about and what we can do
about it. Why are the results of policies so often the opposite of
their ostensible objectives? Why do special interests prevail over
the general interest? What devices can we use to stop and reverse
the process?