Senator Bill Van Gerpen (R-19/Tyndall) delivered the most impassioned remarks on the Senate floor in opposition to House Bill 1182 yesterday (his “Big Stones” speech, beginning around 1:49:50 in the SDPB video).
In opposing the sales tax increase for teachers, Senator Van Gerpen called for turning over budget “stones” and finding existing funds to raise South Dakota’s teacher pay from 51st to 37th in the nation (tying our historical ranking peak in 1945–1946). He offered no formal amendment to pull that money out from under those stones; he just insisted that raising taxes while “our sons and daughters are fighting to protect our freedom” is wrong (scroll to 2:00:55 for full paragraph):
When you take a dollar bill and you take another half-cent off that dollar bill, you take the opportunity for South Dakotans to choose how to use that half-cent. When you increase tax, you decrease freedom. When you increase tax, you sliver away people’s freedom. While they’re over there trying to protect our freedom, we’re back in this house trying to decrease their freedom. That’s what happens with a sales tax increase [Senator Bill Van Gerpen, Senate floor debate, 2016.03.01].
Senator Van Gerpen posits an inverse relation between taxes and freedom: if one goes up, the other goes down. f = 1/t.
Senator Van Gerpen’s position is wrong.
First, let us test his statement in the extremes. Imagine the state took all of your wealth in taxes. That would take away most if not all of your practical freedom, as you could not buy groceries or pay your mortgage. That’s clearly a bad situation.
But suppose the state taxed none of your wealth, or anyone else’s. If taxes go to zero, freedom goes to… what? infinity? No. More accurately interpreting the mathematical expression above, we say the f of your freedom becomes undefined. Collect no taxes, and every public institution that allows you to secure, cultivate, and enjoy your wealth disappears. Schools, roads, police, courts, parks, laws, the Constitution itself—all become toothless or nonexistent. Whatever “freedom” you retain in a universally tax-free life extends only as far as the height of the walls you can build and the range of the rocks you can throw to stave off the barbarians who want to crush you, take your stuff, and hear your women lament. The freedom to hack away at invaders with your sword to hang onto a half-canteen of dirty rainwater isn’t really freedom. See also Thomas Hobbes and Mad Max.
So somewhere between the state of nature and the soldier-crushing tyranny Senator Van Gerpen envisions arising from House Bill 1182, it seems reasonable to posit that there is some level of taxation that gives us more practical freedom. When we stop barbarizing each other and say, “Hey! Cease fire! Let’s make a state!”, when we collect those first dollars (diamonds? beaver pelts?) to pay for our first cop, our first school, our first jail, our first city snowplow, our lives get better. With our first tax, we buy our first liberty—not just the raw, wild freedom of hunting rabbit and then choosing whether to fight or flee when meaner dudes show up, but real liberty, with rights backed up by law and shared institutions that we create and support with our taxes.
The relationship between freedom and taxes appears not to be inverse but a hill-shaped curve, with zeroes at the extremes (zero freedom with universal tax rates of 0% and 100%) and some peak freedom somewhere in the middle. Senator Van Gerpen himself tacitly acknowledges this truth when he speaks of using existing funds to fund teacher pay raises. Those funds come from taxes that had to have been increased at some point in the past. By Van Gerpen’s Law, those increases should have decreased freedom. Yet Van Gerpen doesn’t propose repealing those taxes; apparently he finds some increase in taxes and the concomitant (by his thinking) decrease in freedom acceptable.
The question Senator Van Gerpen ought to ask about the HB 1182 tax increase is the same question we ask when we buy burgers and cars: “What do we get for our money?”
With HB 1182, we get $67.4 million to support raising South Dakota’s teacher pay 20%. We get to shed our 30-year status as the lowest paying state for teachers in America. We take our boldest swing ever at ending the teacher shortage and making sure our public schools can keep quality teachers in every classroom. We reinforce our schools and ensure the next generation of kids can get a good public education, which will be the basis for their future freedom.
The price tag for those gains: $212 a year for middle-income families. $4 bucks a week.
Senator Van Gerpen and the rest of us should all watch closely to see if the new sales tax and funding formula produce the results in our teaching workforce that we seek. But Senator Van Gerpen’s abstract contention that “When you increase tax, you decrease freedom” is as incorrect as saying that spending money on a car is always a bad deal. We give up our hard-earned money to buy cars to get us to work and take vacations. We give up our hard-earned money to pay taxes to support public schools that make all citizens richer and freer. The additional tax we will start paying in June will improve South Dakota’s overall freedom.