 Episode 9 Individual vs. Bureaucratic Spending San Francisco officials decided in 2022 that the city needed more trash cans. While they could have simply purchased simple, ready-made bins, they decided instead to commission a local firm to create 15 custom designs, each cost between $11,000 and $21,000. They then placed QR codes on each can so residents could vote for their favorite model, without any reference to the price. One member of the city's Board of Supervisors, Matt Haney, criticized the plan despite voting to approve it. I think most people would say just replace the cans with cans that we know work in other cities, he said. A trash can is one of the most basic functions of city governance. And if the city can't do something as simple as this, how can they solve the bigger issues? Haney's criticism raises important questions about why bureaucrats make different decisions on how to spend money than private individuals. Consider how you make spending decisions for your household. Most likely, you try to maximize quality while minimizing cost. But how do your priorities shift when you buy something for a stranger? You likely prioritize price well over quality. Now imagine that you're spending someone else's money. If you are purchasing items for yourself, you will probably prioritize quality over price. But if you are spending somebody else's money for the benefit of strangers, you would likely pay far less attention to both price and quality than you would when spending your own money on yourself and your family. This is how bureaucrats make decisions about how to spend the money you pay in taxes. Think about how much money your household pays in taxes each year. Let's assume a family of four with an income of $70,000 a year, which is the national median household income. Most obvious are the taxes withheld from your paychecks, which include income and payroll taxes, along with social security and Medicare payments. Depending on the state you live in, you will have your salary reduced by roughly $21,000 each year. But this is only the tip of the taxation iceberg. When accounting for property taxes, sales taxes, and other embedded taxes, which are various regulatory costs, such as business taxes and tariffs that are embedded directly into the prices of goods, the total tax burden for a family earning $70,000 will be around $30,000 each year. And this doesn't even include the many fines and fees levied by government agencies or the so-called inflation tax. But it is enough to ask one simple question. How would an additional $30,000 per year change your family's life? Would you voluntarily spend it on things like custom-made trash bins?