Welfare for Boat Docks

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Lee's Ford Marina

Recently an article in the local paper about the impending rise of the waters in Lake Cumberland was cause for rejoicing. A lot has been said about how the declining lake levels have negatively impacted tourism and the necessity for relocating boat docks has cut into profits. One of the local operators responded to the news with an appeal to the Corps of Engineers to help the dock owners recover some of their lost money.

Around here most of us love Lake Cumberland and want to see the businesses associated with the tourist industry do well but this is also a pretty conservative area politically. We hear a lot of talk about displeasure with government spending too much money but often we just don't realize where a lot of it goes.

Jamestown Dock

It this case the dock owners are asking the Corps of Engineers to come up with some money but the problem is that even the Corps has to get the money somewhere. The question is whether or not it is appropriate for the American taxpayer, (that is every one coast to coast), to chip in to help these private businesses manage the risk involved in operating their businesses. In every business there is some inherent risk that one may lose his or her investment if the business does not turn a profit. It is difficult to see how an operator of a business that depends on Lake Cumberland should not be liable for the risk associated with the business. There is no argument that these businesses have been negatively affected by the lowering of lake levels in order to repair the dam but it seems that it is risk that should be assumed privately and not the responsibility of the United States of America. One could make the argument that the businesses are vital to our economy in terms of jobs and tax revenue and therefore deserving of public investment but that could hold true for most businesses. For instance, my business is small but it keeps me and my family off the public assistance rolls and provides a couple of jobs. I doubt that my business would be vital enough to get government to bail me out if risk overtook my ability to make a profit.

Another relevant thought is the tax deduction for businesses to provide health care for employees. This expense is deductible for the company and is not taxed as revenue for the recipient when in fact it represents a sizable portion of a persons pay package. It is an example of what is called a tax expenditure. An amount of income that is not deemed to be taxable. If you were to not receive health care benefits from your employer and you bought insurance on the private market you would have the option of taking a deduction on your taxes for that amount. Think about that for a minute. Now, why would you not be taxed on that amount as income? You received the money as payment for your work, why is it not taxed? The other side of the coin is since you are not paying for your health care then who is? Be assured, the health care providers and insurance companies are getting paid but whose money is paying them? The inescapable fact is that the American taxpayer is paying for those benefits since the money lost through that federal tax expenditure has to be made up from somewhere.

Wait a minute! Isn't this what we were arguing about a couple of years ago? Isn't this still the most contentious bone in our public debate? Can it be true that we already have taxpayer funded health benefits only not everyone shares equally? That is exactly the case. You like your employer furnished health benefits? That's great but why should the American taxpayer have to pay for your health care through funding the exemption you or your employer enjoys? Fact of the matter is that if the American taxpayer was not picking up the tab you would have to pay quite a bit more in income taxes.

Don't get me wrong. Most of you know that I am a strong proponent of a system of national health care. I prefer something like Medicare for everyone that would be funded by the taxpayer but the difference is that more people would be covered and it would be more egalitarian. The way it is one could incorrectly conclude that he or she was working for it but since it is a tax deductible item it is the taxpayer that funds it.

But I would prefer that this column focus more on how people take advantage of government sponsored assistance and other programs without realizing where the money comes from. Then many of them go out a vociferously protest other government assistance programs. Having said this it should be acknowledged that government uses the tax system to promote or dissuade certain behaviors and this is an accepted use of the tax code if the results are intended to promote the greater good.

Just as Mr. Calhoun and I were speaking of a couple of weeks ago, government has its tentacles inserted into our lives in ways we fail to see. Our difference is in whether or not such interference is insidious. I believe that government can be a force for good and I think most other people take advantage of that characteristic of government even if they don't realize it.

Next time you itemize deductions on your tax returns or even when you take the standard deduction ask yourself how government makes up for these exemptions. Next time you complain about someone else's government benefits take a look at your own.

Well, that's my take on a couple of the quirks of the tax code and various government benefits. Enjoy the blessings of living in the USA.