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Thursday, March 19, 2015

197

Bjorn sat down at his desk. And with the numbers in front of him, he started to estimate the value of all the services he got from the state, so as to come up with a more correct number for his actual net income.

He made a list of all the free stuff he was getting from the state. Then, next to each service, he put an estimate of what the service was worth. For health care, he came up with a ball park number of how much it might cost for a lifetime. Then he took that number and divided it by eighty years to get what may be a fair annual price for an insurance policy. For his pension, he put down fifteen years of modest consumption, and divided that price with forty years of work. And for old people care, he put down a ball park number for what two years of home care might cost, which he also divided by forty.

For his two children, he estimated a price for putting them through school, and divided that with forty. Then he added some numbers for police protection and defense. Finally, he threw two years of unemployment into his calculations. He added up the numbers and divided it by twelve to get the average monthly cost of all the services.

It was a significant number, equivalent to one third of his gross income. But he was being taxed much more than that, so he looked through the numbers again to see if he had greatly underestimated any of the costs. He added to the numbers to make the total bigger, but there was no way to come anywhere close to his total tax rate without putting down ridiculously big numbers.

Somehow, at least half of what he was paying in taxes were going to something other than his welfare. Some of this might be going to the poor and needy, he thought. But even then, the total tax rate seemed more than a little excessive. And this was just the tax on his income. In addition to this, there was sales tax, property tax, licenses, fees and so on. All adding to the total cost of the supposedly free stuff handed out by the state.

Bjorn adjusted his tax rate to reflect what it would have been, had he not been in the unfortunate situation that he was, with back taxes on his inheritance. But there was still a lot of unexplained overhead. Even at a typical tax rate, the numbers were hard to explain.

"So, where does all this extra money go?" Bjorn wondered. Then, he realized that he had not added in the bureaucracy required to process the tax returns, and funnel the money into the various services, and for a moment he thought that this needed to be added to his list. However, when he thought about it a little more, he realized that it would be a mistake to include the bureaucracy as a service. He had listed each actual service with generous numbers that should easily account for their internal administrative overhead. Adding a separate line for bureaucracy, as if it was a service in itself, would be wrong. It added nothing to his well being, and was therefore not a service. Yet it consumed more than half of his taxes, and even in an ideal situation with a typical tax rate, the bureaucracy was consuming at least thirty percent of the taxes.

"But that means that there must be at least one bureaucrat for every three individual working," Bjorn thought. "That's crazy! Surely, the bureaucracy is not that inefficient. We are talking actual bureaucrats here, not people like myself, providing one of the services listed here."

Bjorn had defense as a distinct item on his list of services, so he was not himself a bureaucrat. He was a service provider. The bureaucrats were overhead, pure and simple. And they were, according to his numbers, consuming a large part of people's income. So much so that Bjorn got a distinct feeling that something sinister was going on. "Someone is siphoning money out of the system," Bjorn thought to himself. "There's simply not enough bureaucrats in this country to account for this big number. Something else must be going on. Some fat cat out there is having his pockets lined at the public's expense."

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