Daniel J. Mitchell

Remember when you got your first paycheck, presumably when you were a teenager? If you’re like most people, you worked a bunch of hours and calculated how much money you expected to receive, only to then be disappointed when the check you received was for a much smaller amount.

That was your rude welcome to the government-created gap between how much a business spends to employ you and how much money you actually receive. You probably looked at your check and tried to figure out why there was such a big difference between “gross pay” and “net pay.” If you’re like me, you had no idea about the workings of the Social Security system, but you were irked that you lost a bunch of your pay to “F.I.C.A.”

The only “good” news is that you probably had no idea that there were a bunch of taxes and costs that your employer incurred to employ you. So you were spared the anguish of knowing that your pay would be even higher than your gross pay if government wasn’t such a heavy burden.

This was one of the issues I raised in a recent appearance on CNBC. The debate supposedly was about whether workers are getting ripped off when they are paid with debit cards, but I think that’s a minor problem compared to the cost of big government.

I made the rather obvious point that there should be full disclosure of any fees and charges for the use of these cards, but I was much more concerned that the debate was overlooking a much bigger problem. The biggest threat to workers is a rapacious government that takes more and more of their paychecks.

I also explained that low-income workers wouldn’t be so vulnerable to fees if they had easier access to banking services. Unfortunately, government regulations such as money-laundering laws make it very expensive for banks to provide accounts – particularly for folks with modest incomes.

In other words, we’re looking at another example of Mitchell’s Law. Governments impose policies that cause problems. And then the politicians say we need even more intervention to deal withe the problems caused by previous interventions.

Which is why this poster is a very accurate description of how Washington really works.


Daniel J. Mitchell

Daniel J. Mitchell is a top expert on tax reform and supply-side tax policy at the Cato Institute.