COP: Why everyone should pay income taxes

Lee DeCovnick

The oft-quoted statistic, that 47% of the households pay no federal income tax, informs us that income taxes are just another wedge issue used by cynical politicians to garner votes at the expense of our society. Our country needs all its citizens contributing federal taxes, as a constant reminder that government programs are neither free nor a right under our Constitution. Many years ago, while toiling in the halls of corporate America, I was given additional responsibility as a morale officer for a large division of mid- level white-collar executives along with a modest budget for miscellaneous expenses. For those who have never worked in corporate management, a miscellaneous expense budget is just another name for an old fashioned slush fund. Woo-hoo, I thought, this could be fun.

It took three "off-site" meetings (ah...three 90 minute lunches at a local upscale brew pub including one adult beverage per person, all paid for by the miscellaneous expense budget) with an appropriate cross section of S&S (skills and seniority) from the entire division to reach a consensus on how best to boost morale. I listened to all the suggestions and decided to provide free sodas and fruit juices from the sixteen vending machines in our facility to all our divisional employees for the next three months.

I knew something was awry when I told my boss, the senior VP, my plan. He just stared at me, smiled like the Cheshire cat in "Alice in Wonderland", and immediately offered to quadruple my miscellaneous expense budget. Normally he ended our conversations by telling me, "Don't screw this up!" This time he said "Let me know how it goes." Not a good sign.

Our sixteen vending machines sold around 120 cans per day, per machine at 50 cents per can. So that rounds out to 2,000 cans per day for the division. Cost per can, (this was quite a while ago) was thirty-three cents each, which included the cost of the can plus the vendor's profit, which paid for the machines' daily restocking and the maintenance of the machine. The total cost of the free soda and juice program was anticipated to be .33 cents per can plus the lost profit of seventeen cents per can. So, fifty cents per can times (2,000 cans + 400 more cans per day increase in consumption due to the lower cost) times 91 days = $109.2K. That seemed like an equitable expense to increase the morale of the division. Especially since my new budget was now $120K. Whoo-hoo, it all looked so simple on paper.

The first day of free soda and juice was, as expected, a blowout, 6,000 cans - three times the regular distribution. But the next day went up to 7, 000 cans. And the following day distribution went up to over 11,000 cans. The vendor also called on the third day to complain that he now needed two delivery trucks a day to keep up with the demand.

Before dawn the next morning I sat hidden, near one of the most active vending machines. A white-collar manager from my division used his security card to let in two guys from our warehouse into our facility. They came prepared, with empty boxes and handcarts and proceeded to access around 250 cans from the vending machine before the regular office staff arrived. From their conversation I gathered they were planning to sell the sodas and juices to other friends in the warehouse for half price and give the white-collar manager a third of the profits. Total free distribution that day, 16,300 cans. Good grief, I had created an insatiable monster at the intersection of avarice and opportunity.

That afternoon I called the vendor, and told him to adjust all the machines to begin collecting five cents per can. Total distribution the next day, 12,000 cans. Two days later I raised the price to ten cents per can and distribution dropped to 8,300 cans. After stair-stepping the price up over the course of a week to twenty-five cents per can, distribution finally settled down to a consistent 2,500 cans per day.

The following week my boss took me to an elegant lunch where I was relieved of my morale officer duties. I was also given an official "attaboy" for my "201" file for reacting quickly to the situation and learning an essential lesson in human nature. Oh yes, I terminated four managers for letting their buddies inside the corporate offices so they could steal corporate assets. Woo-hoo, that was fun.

Our country needs all its citizens contributing federal taxes, as a constant reminder that government programs are neither free nor a right under our Constitution.