Elizabeth Warren—Harvard Law School professor, former Obama consumer-prot ection czar, and now a candidate for Senate in Massachusetts—recently gave a revealing presentation of her views on justice and taxing the rich:
"There is nobody in this country who got rich on his own. Nobody," she said at a campaign event. "You built a factory out there—good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. . . . You built a factory and it turned into something terrific or a great idea—God bless, keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay it forward for the next kid who comes along."
There's much truth in Ms. Warren's statement. But if government stuck to what it does fairly well—roads, police, fire and the courts; enforcing contracts that help businesses interact with their customers and other businesses—the federal government wouldn't need to spend over $3.5 trillion a year, as it now does. And of course it's state and local governments—and not Washington—that primarily fund police, fire and education, so it's a bit strange to ask the rich to pay their fair share of federal income taxes because they enjoy police protection.
Much government spending supports activities that are ineffective or even harmful to the economy, often helping the politically powerful at the expense of the rest of us. Wouldn't it be great for the federal governm ent to stop federal export subsidies, propping up financial institutions, meddling in the education system, and trying to engineer the entire health system from the top down?
If the feds stopped all that, Ms. Warren would have a stronger point. We could all feel some gratitude for government's role in helping us live better lives. All of us, rich and poor, would look at government differently.