Monday, September 12, 2005

Taxes: An Old Way of Doing Business

Feeding people is more important than most of the services government provides. Yet, even a government official, Melvin Joseph, Tax Office Manager, warned the House Commerce and Retirement Committee that seizing any enterprise would be overwhelming for the ASG to handle. If we paid the ASG taxes to provide equal distribution of food, we would have been starving a long time ago.

The mere fact that government provides services makes it a business. Like private enterprises, government employees work for a profit because they expect their daily income to be more than their daily expenses. Unlike private enterprises, government’s revenue depends on an up or down vote in the Fono and majority opinion, not individual customer satisfaction.

The government provides services Samoans, as entrepreneurs, can make a business. But with government providing these services, our people have little incentive to even try, and if they do, they face competition from the ASG. And then the ASG turns around and uses our taxes and its political muscle to drown out its competitors. Rep. Paopao J. Fiaui said during hearings on whether ASTCA can pay back the $10 million loan from the government employees’ retirement fund, "My advice, go buy ASTCA phones and don't buy any Blue Sky phones."

The reasoning for government to provide services is the fallacy that the market can’t provide such services on its own. But if the ASG provided our food, clothes or shoes since its beginning a 105 years ago, we would today think that any other way of obtaining those goods would be impossible.

And if a guy like me came along and told the people that we could make an economy out of food, clothes or shoes, entrenched government employees whose wealth and glory depended on monopolizing the food, clothes and shoe industries would come out to oppose my recommendation. Such government employees would have titles like Head of Food Department or Department of Shoes Director.

David B. Musick of KVZK-TV, came out to bash Common Cause for rightfully demanding privatization of our industries and services. He ends his letter to the editor with “Remember; government is not ALL bad, and private companies are not ALL good!”

It’s not a matter of who is good or who is bad. It’s a matter of what incentives are involved. Because the ASG can always raise taxes or bum off more money from the Fed or the Retirement Fund, it has no need to innovate and overcome such costs and obstacles that stand in the way of benefiting the most number of people. Remember that broadcasting used to be widely regulated in America and the federal government created PBS to ensure that supposedly unprofitable programs would see the light of day. But only after deregulatory moves of the 80’s to allow licensees to “profit” do we now have too many channels to choose from. Yet PBS is still with us, leeching off our hard-earned taxes.

Innovation in education, security services, hotels, medical care, insurance, telecommunications, and alternative fuels for electricity await us. But it will take the ASG to stop using our taxes, federal grants and political grandstanding against entrepreneurs who are willing to make a for-profit business in those areas to make that happen.


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