Lighthouses

Eagle Bluff Lighthouse, Door County, WI

Linda and I returned over the weekend from a very enjoyable two-week car trip around Lake Michigan so even though I’m not quite caught up with other matters I have to post a quick blog so I can use one of the new photos.  While traveling I forced myself to read “Sales Tax for Education Would Generate Millions” by OCPA fellow Steve Anderson.  He and others at OCPA seem resigned to the passage of State Question 779 which is somewhat surprising and must frustrate them to no end—imagine citizens choosing to finance more government.  His post proposes ending the sales tax exemption for public schools in Oklahoma.  His only reasoning is:  “As conservatives, we believe that disincentivizing government spending is a good thing, not a bad thing.”  In other words if we just make public schools pay sales taxes then what they do will cost more and we’ll have less of it.

He later says:  “Moreover, private-sector companies pay these sales taxes.  Making the government pay them would help level the playing field.”  Sound economic theory informs us that it is important to “level the playing field” among competitors in the same market, but that it makes no sense when talking about the interaction of private sector companies with the government.  Milton Friedman must be turning over in his grave—though he has better use of his eternity than reading OCPA drivel.

The right way to approach government services in a market economy is to first determine what services are appropriate for government to provide, i.e. public education, then determine how much, i.e. what ages and academic standards, and finally determine how to do that most efficiently.  Public education is too complicated for a short or even one blog post so let’s look at another government service—lighthouses.

We spent a little time in Door County Wisconsin which has that name because the entrance to Green Bay was called the “doors of death” by the Native Americans and trappers in that area.  To make passage into Green Bay safer lighthouses were erected to orient sailors and warn of dangerous areas.  Lighthouses are a classic example of a service best provided by government for the simple reason that, unlike a movie in an indoor theater, it can be seen by all whether they have paid for it or not.    No one shipping company might have the resources to fund all the lighthouses needed for safety, and certainly would resist others benefitting without paying, so it has long been a natural for government to provide.

Having decided that government should erect lighthouses, then it must be decided where they will be located and how designed, constructed, etc.  Once those decisions are made then it makes sense to erect, operate and maintain the lighthouses as efficiently as possible so the fees and taxes needed are as low as possible.  Where in this scenario does it make sense to then impose a sales tax on the materials needed to construct them?  That would simply increase the cost and in turn increase the fees and taxes required for their construction.  I don’t get it.  I guess Mr. Anderson just wants fewer lighthouses, period, just because.

Remember lunch is on me if you are first to identify the photo location.  And by the way Dave Bond has still not explained where the $100 million for teacher raises he promised to Channel Six’s Scott Thompson and viewers—see my Something Special post.

***Gretchen Hannefield identified the photo***