Such a situation seems to be shaping up in America, as described by Christopher Chantrill at the American Thinker today in Off-The-Books America. Now, there has always been a certain amount of "black economy." Do you report the proceeds from a garage sale? No? Well, shame on you. But the reasoning isn't hard to see. You bought that stuff with taxed money. The sale of the property didn't net you anything you didn't already have, but only made the stuff ultimately cheaper. It's as if you bought it on sale. Such "tax evasion" is petty, and not worth going after in any case. But what Chantrill describes are untold numbers of people, living off the grid, largely unregulated and untaxed, yet they are competing with legitimate business that do pay taxes and do submit to onerous regulations. Yet the only way that the state can force ever more onerous regulations down peoples throats is to become more tyrannical, to make the penalties even more draconian. Chantrill paints a bleak picture:
Every time the government enacts a new benefit or tax or economic regulation, it increases the cost of doing business for ordinary, law-abiding businesses. Every marginal business affected by the new tax or regulation has to make a decision: does it try to obey the law, or does it go "off the books"? Of course, our liberal rulers understand the problem. That is why they often exempt small businesses from the latest regulation. But what they are admitting, every time they do it, is that their high-tax social-benefit state is profoundly unjust.Chantrill doesn't describe the half of it when it comes to onerous regulations adding cost and making us uncompetitive. Most small businesses do not have the wherewithall to hire lawyers to pour over the CFR looking for the thousands of ways they may be violating the law every day. But they are what built this country, and keeps it fed. They deserve better from our would be rulers.
One of these days, some right-wing demagogue is going to turn the general disgust with liberal injustice into a national political movement of bitter clingers.
But don't expect the ruling class to notice until it is too late. As Deirdre McCloskey writes: a typical oligarchy rises, closes to new entrants, and then goes to sleep.
Meanwhile, the regulatory state starts to break apart from its internal contradictions, and more and more of the rest of us decide to work off the books. But there comes a time when it is not just economically necessary to avoid unjust laws and taxes. It becomes a moral imperative.