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How government makes us unhappy

Arthur C. Brooks, associate professor at Syracuse University’s Maxwell School of Public Affairs, has a commentary in the December 8, 2005 Wall Street Journal titled “Money Buys Happiness.” Rich people, the author tells us, are much more likely to say they are happy. Although we are becoming richer as a whole, the percent of people saying they are “very happy” is the same today as it was 30 years ago. Some people say it’s the rich having relatively more than others that makes them happy. This excess happiness of the rich being bad, they say, we should use progressive taxation to improve our “moral fiber” by making after-tax incomes less divergent.

But is this a good idea? “In fact there is another explanation for unchanging happiness levels over time which is rather less supportive of income redistribution. As incomes rise, so generally do levels of government revenues and spending, and there is evidence that these forces work against personal income on the overall level of happiness. For example, a $1,000 increase in per capita income is associated with a one-point decrease in the percentage of Americans saying they are ‘not too happy.’ At the same time, a $1,000 increase in government revenues per capita is associated with a two-point rise in the percentage of Americans saying they are not too happy. In other words, not only can money buy happiness, but it may be that the government can tax it away as well.”

Mr. Brooks also tells us that donating money and time — that is, the giving of charity — illustrates the link between money and happiness: “Givers of charity earn substantial mental and physical health rewards, even more than do the recipients of charity — empirical evidence that it is indeed more blessed to give than to receive.”

The actions of government can swamp private charity efforts. In the week after hurricane Katrina, I read that private donations had reached $600 million. I thought that was wonderful, until the next news story told me that Congress had just approved some $60 billion in relief, that being described as merely the down payment on the final spending. Government spending overwhelmed private charity, even though not many seem satisfied with the government response, and there are many stories of effective help supplied privately.

So when government taxes us to pay for programs that take the rightful property of one person and give it to another to whom it does not belong, government harms us in two ways: it taxes away happiness and reduces our capacity to engage in charitable activity.

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