Re: Cutting Taxes to Spur the Economy

From: Brett Paatsch (paatschb@optusnet.com.au)
Date: Mon Jul 07 2003 - 18:16:26 MDT

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    Lee Corbin writes:

    > Brett writes
    >
    > > So there are two ways of "reducing taxes". (1) cut
    > spending.
    >
    > Stop right there. What possible incentive do government
    > employees have to cut spending?

    First, to be clear, I wasn't saying that *government employees*,
    (as opposed to government ministers), either as a class, or as
    individuals do have such an incentive.

    The decision to cut spending is usually made by a the
    government - by elected officials without lifetime tenure. Their
    incentive is to get elected and giving money back to taxpayers
    is pretty easily perceived by most taxpayers as a good for them
    all else being equal.

    But to answer your question, government employees are not
    only members of the government employee class. As
    individuals there are many other groups with claims on their
    loyalty. A competent government employee that can daily see
    what other incompetent government employees are wasting
    money on and who genuinely desires to be a public servant
    would not necessarily be hard to find. Every departmental
    restructure sends government departments and individuals
    in them looking for their own place in the new scheme.

    A minister hands down a need to a department head for a
    10% cut and the department head looks for the ways to
    realise that cut or tries to oppose the cut as the department
    head sees fit. Some negotiation may ensue by a competent
    department head will at least go back to the minister armed
    with information that supports his case. The department
    head sends a message down to his/her subordinates look for
    ways to cut costs. Those that find them, perhaps at pointing
    out inefficiencies due to technological change that make say
    a few old clerical types redundant will probably be rewarded.

    Human nature being what it is not all the recommendations for
    employee cuts will be motivated by the higher good. Some
    will want to settle old scores, remove competitors, use the
    opportunities in the restructure to alter their competitive
    position.

    I am inferring from your question a view that government
    employees see themselves as a class and that their class
    loyalties are not easily shaken up. I think this is mistaken.
    Other loyalties in the case of almost all individuals that
    happen to be government employees, such as loyalty
    to oneself, one's family, one's friends, and even to the
    ideal of good public service will in some cases if not
    almost all cases be stronger.

    Brett Paatsch.



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