Tuesday, July 31, 2012

The Hidden Taxes of Underfunded Government Services

Waiting in line to get a number to wait some more at DMV.
I am writing this while waiting at the DMV in Syracuse, NY. More than half of the service windows are closed, hinting that there was once a time when more people worked here and lines were shorter. I know the state has cut services to deal with a budget shortfall without raising taxes, but I view my time here as a particularly onerous tax. I know that I'll be working late tonight making up the time spent here and I'd be willing to pay a lot to avoid that. That's the hidden tax my political leaders imposed on me to avoid an explicit tax. Right now that looks like a bad deal.

There are other hidden taxes. Crumbling roads create hassles and wear and tear on vehicles. I once ruptured an oil pan when I hit a deep pothole, which cost hundreds of dollars to repair, plus towing costs, plus the time my wife wasted coming to fetch me and I spent waiting for her and, later, the tow truck. And for bicyclists like me, potholes can cause injury or death. I'd pay a lot to avoid those hidden taxes.

Underfunding education lowers our productivity, as does skimping on basic research and development. And cutbacks on law enforcement can entail huge financial and human costs.

By all means, we should make government more efficient and cut wasteful programs and services.  We absolutely have to figure out how to cut spending on entitlement programs like Medicare.  But we should be spending more money on some programs and services because they'd save taxpayers much more in hidden taxes than they cost in explicit taxes.

Put differently, we are the richest country in the history of the world.  Why do we aspire to third world public services?

[When my number was finally called, I asked the DMV person whether staff had been cut.  She was surprised by the question, but, after a moment's hesitation, said, "Well, when people retire they aren't replaced. So I guess that's a cut."]

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