Nickle-and-Dimed in a Protection Racket

by Jeffrey Tucker, Lfb.org
Jan. 13, 2012

"Thank you," said the clerk at the municipal court as she handed me back my credit card. I paid a ticket for one of the few "crimes" the police seem to exist to punish in my town: failing to come to a dead stop at a stop sign. This is, obviously, not the same as running a stop sign. No one is in endangered. No one is hurt. No one even notices except police looking for another way to collect taxes. But the charge is the same, regardless: $138.

I instinctively responded the same way, "Thank you," before quickly clarifying that I was not thanking her for taking money from me for no good reason, but only for being polite. She had to rub it in by pointing out that she saved me $218 by accepting my proof of auto insurance. Saved me money! Yes, just like the withholding tax saves me money.

Governments at all levels in the United States have begun to master the art of extracting as much money from the public as possible in every conceivable situation, over and above what we normally cough up to states at all levels year-round (which is commonly 40% of our income).

Maybe you have noticed this. If you want a copy of your birth certificate, you pay $20. If you want to get an identification card, that's $30. If you want a copy of any police report, that's $20. If you want a passport, that's $110, plus a $25 processing fee. You pay for every inspection sticker on your car, every form you request, every certification you get, every license you are required to have, every service you hook up and just about anything and everything else that government does to you or for you.

There are many odd things about this practice. In the private sector, the price of a thing reflects a negotiated settlement between the seller (who wants more money) and the buyer (who wants more goods or services). The point of agreement is what is called the price. It is rooted in the subjective judgments of the consumer and the relative availability of the thing being bought. It other words, it is not arbitrary.

But what of these government prices? There ought to be some other word for them, since there is no real exchange involved. The bureaucrats just make them up. What fun that must be. Wouldn't you love to be a fly on the wall when the price planners are dreaming up what they believe they can get us to cough up for these services?

There are other mysteries associated with this pay-per-service model of government. We are always told that the whole purpose of taxation is to provide all these wonderful services for us. Why, then, must we pay yet again when we actually use one of these services? Tickets I can vaguely understand: They are more like direct taxes. But the rest of these fees are based on a kind of retail model: If you want something from government, you are going to have to pay for it. We are rather used to this model in the private sector, but there is a big difference. The private sector doesn't tax us all year long. We pay only for what we buy. But with government, we pay all year, and then we pay yet again when we actually get around to using government for some purpose.

The arrogance is palpable. Nor is there any negotiating with them, much less walking away from the deal. There is no price-competitive operation down the street to which you can move your business. "Hey, your driver's license fee is too hefty; I'm going down the street to use Wal-Mart's discounted service!" Nope, that doesn't happen. There is one, and only one, provider.

Further, if you want the form/license/certificate/report or whatever it is, you have to shell out precisely what they say without negotiation. After all, they need money to exist, right? I get that, but I thought that's why we pay a tax on every dollar we make, every purchase we make and every capital gain that comes in and even for the right to own a car or a home. Why wouldn't this be enough to permit government to actually do the thing they promised they would do? Why must we pay again when it comes time for the government actually to do something for us?

By the way, it is the same with public school, you might have noticed. Ask people why they like their schools and they invariably talk about things like the debate club, the theater program, the band, the sports teams, the science fairs and the like. But if you know how these programs work, they all have "booster" programs that involve having the parents either commit time or cough up surprising amounts of money just to make the whole thing function.

In many ways, the parts of the public school situation that people end up liking are the ones that are effectively privatized by parental involvement both in time and financial commitment. The free stuff that the school provides ends up being the parts that people don't really like that much, whereas the programs that people actually like and use are the ones that somehow end up requiring new infusions of cash.

By the way, it is the same at the federal level. You have probably noticed this. Let's say there is a hurricane that hits Mobile, Ala., and creates a mess all around. Government spokesmen will solemnly announce that, unexpectedly, it will need Congress to pass new spending of $20 billion or whatever to clean up and rebuild after the storm.

Meanwhile, what about all the rest of the money we are shelling out all year long for disaster cleanup and for rebuilding? There's never enough left for a rainy day. Everything that government does to great fanfare seems to require a fresh infusion of funds above that which it has already taken.

The reason is apparent, actually. In the way that governments at levels budget their money, every dime must be spent every year. Any that is left over gets reallocated to a different program or a different office or department. So the bureaucracy spends on itself. When suddenly there appears an unexpected need for it to do something besides merely exist, it has to find the money somewhere.

I'm not against this fee-for-service approach to government. It should be applied across the board and opened up for competition — and all the other money raising it does throughout the year should be cut to zero. That way, those who want public parks, the passport office, wars, regulations or what have you could pay for them on a need basis, and government could otherwise leave us alone the rest of the year.

On that note, I expect that I'll decline to pay for the service of getting a ticket for failing to lock my wheels at every stop sign.

Jeffrey Tucker publisher and excecutive editor of Laissez-Faire Books, is author of Bourbon for Breakfast: Living Outside the Statist Quo and It's a Jetsons World. You can write him directly here.