A Threat to the “Ownership Society”

The American Enterprise magazine is one of our favorites; under Karl Zinsmeister, it has become a premier public policy publication. So we were happy when Karl asked us to contribute an article to the magazine’s current issue, which focuses on the Ownership Society. The March issue is now available, and our contribution, “Broad Ownership Needs Broad Taxpaying,” is here.
The thesis of the article is that, while giving Americans ownership over their retirement and medical savings accounts is in most respects a great thing, there is one possible undesirable consequence: most taxpayers are tethered to financial responsibility for federal expenditures only through payroll taxes. If payroll taxes take the form of personal accounts, and the remainder of federal services are funded overwhelmingly through the personal income tax, a large majority of citizens will have little financial incentive to restrain the growth of government. Check it out.