Economics Can Be Bewitching!

An?article on the BBC and elsewhere notes that witches and astrologers are now recognized occupations in Romania and no longer part of the underground economy. Practitioners’ incomes are now taxable-and practitioners are now covered by the country’s pension and health insurance schemes. Some witches have cast spells to overturn the new regulations, while others like the new benefits more than they dislike paying the new taxes.

This bizarre case should be an important reminder in these Tea Party days: Our taxes buy something-the services of government. Being locked out of government, as the witches were, has both costs and benefits. It’s natural to try to free-ride on the taxes of others; but if enough of us did that, simple economics shows that the services wouldn’t be provided. In a country like the U.S., with relatively low taxes and few services, do we want to provide even fewer services in order to keep taxes so low or cut them still further?


Colin

Government should be restricted to the provision of public goods, such as the military, police, courts, some infrastructure, pollution regulation, etc. Health care and pensions are rival, private goods. We should simply scale back government to those services which the private sector cannot provide and then set the appropriate taxation level.

Nerf

I can't help but point out that the connection between witches and the tea party is already well established.

jlive

Come on, Colin. Why think that the services you list are any more "public" than services like healthcare? Private companies could be contracted to provide for defense, police, infrastructure, etc. I'm not sure that I *want* the private sector doing those jobs, but then, I'm not sure I want the private sector providing healthcare, either.

Drill-Baby-Drill drill Team

Prior to 9/11 there were over 200 psychics listed in the Greater NYC area Yellow Pages. They predict the future.

Yet none on 9/10/01 had any premonition nor wrote down a warning of the impending catastrophe.

I asked a psychic why she did not predict this event? She said it's not her field. She deals with people not buildings or aeroplanes.

I think 9/11 was very much about its effects on people. I do not subscribe to psychic abilities. But I do admire Nostrodamus' abundant thick beard.

Ian Callum

The US government is less concerned with recognizing your occupation than with recognizing your income. American tax authorities would be pleased to scrutinize any and all types of unreported income.

Ian Kemmish

The UK Natural Law party once put out a party election broadcast in which magician Dougie Henshall pledged to "magic the economy into shape".

It can't be any worse than the other "solutions" currently on offer - I say we get the witches onside by giving them generous tax breaks if they can fix things.

James

For me, and I think for many people, the tax issue is almost irrelevant. It's the "services" - the TSA, the War on Drugs, "RealID", a health care program that penalizes us for having chosen to live a healthy lifestyle, and much more - that I don't want. I certainly would be willing to pay more to free myself of them.

Jacob

I think that the American people should understand American values. Life, liberty, and the pursuit of happiness are all encompassed in legislation. In cutting taxes we are giving an individual the higher right to do whatever they want with less government influence.

Also, I agree with jlive and Colin in that the government should provide a set amount of services and whatever the government does not pick up a private company will. Similar to the way health care is currently run. Government helps the poor and old.

Eric M. Jones

Several states require a license for fortune telling and various black arts, while in NY it is a class B misdemeanor. In Massachusetts (where the Witch-on-Broom is the state bird), some localities regulate it.

My experience with witches is limited. I was once cursed by a witch at a public seminar, and I immediately fell ill. Sure, I didn't believe any of that stuff, but I was sick nonetheless. I recovered, but every time some minor calamity befell me I was reminded of her "curse". This was an annoyance, and conflicted with my understanding of reality.

One day I wrote on a slip of paper, "The Witches Curse", and I set fire to it in a black candle. I felt relieved. Now I steer wide around the black arts.

MunirCMS

I totally agree with what the Romanian government is doing and taxing on the incomes of witches and astrologers. Why should they go around not paying taxes, and taking advantage of the benefits the comes from other people paying taxes, like nice roads and buildings. It is true that if most people go around not paying taxes, the economy would be very bad. Governments wouldn't have the money to pay their debts with foreign countries, the country wouldn't be clean because the government isn't doing its job of cleaning the cities, and the streets would be in very bad conditions because the government doesn't have the money to fix it.

Ghost

Colin @1. The basis of your assertion is flawed.

Private banks borrow (public) money through the Federal Reserve, which at today's rate, is practically at zero interest. Yet, these private banks use this public money to generate their own private profits.

Maybe, instead of scaling back government services as you suggest, we should scale back those services provided by the private sector that the private sector cannot do or do well, even though it's funded by public money.

Nice try.

Ariela De La Cruz

" In a country like the U.S., with relatively low taxes and few services, do we want to provide even fewer services in order to keep taxes so low or cut them still further?"

Professor DANIEL HAMERMESH, Here is my answer: I want to cut the services that do not benefit me and my family and increase services that gear to my needs while keeping my taxes at the current level or reducing them (the taxes).

James

Come to think of it, why shouldn't astrologers & witches have to pay taxes? Economists do.

JaimeCMS

The taxing of incomes of witches and astrologers by the government of Romania is a right thing to do. Just because they are witches and astrologers doesn't mean they shouldn't pay any taxes. Everyone pays taxes regardless of who you are and what kind of job you have. Without taxes, the country, island or state would not be able to bear a government. Governments are maintained by people's taxes and everyone that is offering a service and gaining any sort of income must be taxed. Taxes also provide with funds for the government to be able to impose externalities on everyone else. The government uses those taxes for the maintenance and welfare of every citizen.

RafaCMS

In the US if people didn't start paying taxes, services provided by the government will disappear. Roads will start to deteriorate, the streets will be dirty because no one is cleaning them, and very few roads will be built by the government because they do not have the money to provide for it. If taxes stay the same or increase, I think people will not be angry. They will not mind because as long as they get the services they want and need, they don't mind paying a little extra. Unless taxes get incredibly high.

Gary

How naive to think that the purpose of government is to provide 'services.'

terryjobe

You do your best to keep your children healthy, but sickness and accidents are a part of life. Getting health insurance for your children gives you peace of mind knowing they have health coverage when they need it. Search one the web "Wise Health Insurance" for kids they are the best.

Barbara

Sorry, Colin, health care is not simply a private good, because poor health is rarely a private matter only. Epidemics can close a school or decimate a population. Non-contagious diseases such as cancer can make orphans out of children who need to be supported at the taxpayers' expense. One person's stroke behind the wheel can cause an accident with several fatalities. Lack of access to mental health care contributes to the kinds of tragedies we have just witnessed in Arizona.

Antonio

Maybe Colin should read pages 1-4 of any public economics textbook to learn why healthcare and pension schemes have to be provided, at least partially, by the State.

Jimbino

What governments need to start taxing are the services provided by housewives to their husbands (and vice versa). That would broaden the tax base and increase fairness, since now the husband gets services that he should pay for under a 1099 filing. Of course, tax deductions for marrying and breeding are also grossly unfair.