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Source link: http://archive.mises.org/4104/the-feds-are-gouging-themselves/

The feds are “gouging” themselves

September 17, 2005 by

Earlier tonight I wrote at the Voluntary Trade Council Blog about the plight of the Cleveland office of the Justice Department’s Antitrust Division. It seems the office is currently sharing a building with two drug rehabilitation centers—and with no security, Antitrust Division employees are subject to threats and the horrors of public urination. The DOJ would like to move the office to the local federal courthouse, which apparently has 18,000 of prime space available.

The problem? The General Services Administration is asking for $500 per square foot, which the Antitrust Division finds outrageous. This leads me to ask: How exactly does the government charge itself rent for buildings that it already owns? In theory, GSA constructs and maintains the buildings, and occupying agencies pay rent from their own budgets. But it’s all government money—which itself is all stolen from taxpayers. I am reminded here of Murray Rothbard’s comments on the subject of government employees paying taxes:

[C]ontrary to carefully instilled myth, politicians and bureaucrats pay no taxes. Take, for example, a politician who receives a salary of, say, $80,000; assume he duly files his income tax return, and pays $20,000. We must realize that he does not in reality pay $20,000 in taxes; instead, he is simply a net tax-receiver of $60,000. The notion that he pays taxes is simply an accounting fiction, designed to bamboozle the citizenry into believing that he and the rest of us are on the same moral and financial footing before the law. He pays nothing; he simply is extracting $60,000 per annum from our pockets.

Similarly, the notion that the DOJ is paying “rent” to the GSA is also an accounting fiction. The government’s bean counters are simply shifting numbers from one column to another, essentially an act of busywork.

And to top it off, the DOJ is now seeking to find private commercial space to use in Cleveland given the GSA’s asking price for the courthouse space. This means that office space already owned by the government will go unused and private space will be taken out of the market for state use.


P.M.Lawrence September 18, 2005 at 3:41 am

Well, the theory behind all these manoeuvres is sound, it just rests on the false assumption that there is really a free market going on. The theory is that the department with the office will adjust its price until its “market” clears, and likewise that politicians will adjust their salary demands until their post-”tax” income matches what they could get in alternative employment, and so on, with the compliance cost of all these “tax” exercises being ignored (by the government) just as they get ignored as part of the real costs to real taxpayers. With a proper system these compliance costs really would be negligible – but of course there is no such tax system, just as there is no real free market involved in all these fictit

But it’s all part of the facade they put on things, making it look as though politicians are indeed paying towards the cost of government just like everyone else, and so on. And it does let the tax system stay a little bit simpler, for a system that’s working on the wrong basis in the first place that is.

Horatio September 18, 2005 at 7:30 am

I have an interesting anecdote.
My mother works for US Customs, and after the first WTC bombing they wanted to relocate to a safer location. Customs chose Orlando because the naval training station here was closing down and because of some insane government rule, the navy sold two perfectly good office buildings to customs for $1 each.

Max September 18, 2005 at 10:31 am

Another interesting take on this piece is, that perhaps the DOJ takes into account that the GSA will raise a rent and then wants this amount of money to be shifted to a new tax, thus creating more tax necessity by a virtual component (since the rent would go to another government facility).

Paul Edwards September 18, 2005 at 1:46 pm

What clowns and donkeys they are. “The General Services Administration is asking for $500 per square foot, which the Antitrust Division finds outrageous.” and so “the DOJ is now seeking to find private commercial space to use…” That was hilarious (for a moment). Every story of the stupidity of government never fails to confirm the absurdity that we should allow governments to provide any kind of service at all, including and especially judicial and police services.

Wild Pegasus September 18, 2005 at 6:41 pm

I don’t see what’s so bizarre about this. Large corporations and universities do this sort of inter-department accounting. When I worked for the Penn Physics Department, we had to pay the Chemistry Department for use of their facilities or libraries, and vice versa.

The idea here is not to mimic a free market in anything, but to point out to different branches/department/agencies that they can’t take unlimited advantage of other agencies. That would obviously be inefficient.

Also, Rothbard is oversimplifying. A Department of Energy official who makes $80k but pays $20k in taxes pays them to various levels of government. For example, he makes $80k but still pays $5k in property taxes to Montgomery County. A Montgomery County official makes $75k but pays $17.5k to the federal government. The “net tax consumer” moniker only applies at the level of government for which these officials work.

- Josh

Ohhh Henry September 18, 2005 at 8:17 pm

Probably it never occurred to the employees of the Antitrust Division that their own anti-free-market activities helped create the legions of unemployed who end up using and selling drugs and ultimately peeing in their hallway.

Even the ‘conservative’ and fundamentalist types mostly concentrate on the moral failings of drug users, while overlooking the machinery of government which drives people to such acts of boredom and desperation.

Andy D. September 19, 2005 at 1:14 am

The Penn deptartments had to make money, else they wouldn’t be able to rent anything. Why is there not a dept that teaches the world is flat?

The justive dept doesn’t make money, and can’t be held accountable for thier ability to offer needed or unwanted services. If kids start leaving because the dept isn’t giving them what they want, they lose money.

When janet reno goes unpunished for Waco, there is no consequence to be given.

billwald September 19, 2005 at 2:27 pm

When I was working I spent my net, not my gross, just as politicians do. I still spend my net, not my gross. Average person to stupid to realize this?

Wild Pegasus September 20, 2005 at 6:06 pm

The Penn Physics Department barely makes a dime by itself. Its funds come from the university.

- Josh

Drew May 14, 2011 at 2:00 am

Very good articel about drugs!


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