Category: tax policy

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tax policy too much government

Words and Definitions

As a candidate, Barack Obama promised that he would not raise taxes on any but the wealthiest Americans. Make less than $250,000 a year? You’re home free under his administration. 

I mean, not counting current federal levies.

But President Obama has all the ambitions of a big-​spending liberal. And “big-​spending” translates pretty quickly into “big-​taxing.”

One of these projects is a massive new federal takeover of the health care industry, in the name of “universal coverage.” New taxes would be imposed. For example, anyone who refuses to sign up for health insurance in the new regime would be slammed with a hefty tax.

Obama denies that such taxes would in fact be taxes. He even rebuked George Stephanopoulos for citing a dictionary definition of the word. Leaping to the president’s defense, House Majority Leader Steny Hoyer agreed that the new taxes would not be taxes. “[W]hat we are saying,” Hoyer said, “is everybody will contribute … to making sure that health care options are available to all of our citizens.” 

Try dispute that. It’s like arguing with fog. Columnist Jacob Sullum quotes Hoyer and observes, “So we’re talking about a legally required contribution that will be used to provide a government-​arranged benefit. If only there were a shorter way of expressing that concept.”

Well, in searching for le mot juste, don’t tax yourself.

This is Common Sense. I’m Paul Jacob.

Categories
initiative, referendum, and recall tax policy too much government

Legislative Dreamin’

California voters love their state’s process for placing initiatives and referendums on the ballot. 

Legislators? Most take a much dimmer view. This year they’ve been blaming voters for spending the state into bankruptcy through the initiative. Additionally —  and please hold your laughter — they claim that initiatives have tied the hands of legislators who would otherwise have better managed the state’s finances.

Enter Bob Stern of the Center for Governmental Studies. At a recent public hearing of the Senate and Assembly Select Committees on Improving State Government, Stern told legislators, “Most of the ballot-​box budgeting has come from you.”

Stern was referring to a Center study that looked at all ballot measures over the last 20 years that required additional spending. Stern found that three out of four measures costing money were put on the ballot by legislators, not through the citizen initiative. He also found that the legislature’s own ballot measures cost the state $10 billion, while citizen initiatives cost only $2 billion.

Of course, an even bigger issue is the wild spending spree by California politicians with no ballot box input from voters at all. While state tax revenues have increased a whopping 167 percent over the last two decades, government spending shot up 181 percent.

Voters aren’t perfect, but anyone with a lick of common sense knows the answer to controlling government spending isn’t to free the politicians from voter restraint.

This is Common Sense. I’m Paul Jacob.

Categories
initiative, referendum, and recall tax policy

Money, Money, Money

Money. Politicians like to spend it. People — especially special interests — like to get it. And taxpayers really don’t much like having to pay for all that spending.

So our representatives try to procrastinate their balancing of spending and revenue. How? With debt. Hence our yearly unbalanced budgets.

At the federal level, deficits soar. Many states, however, have constitutional spending limitations and balanced budget requirements. What difference do such limits make?

Well, Professor Barry Poulson, of the Independence Institute, points out that a few years before Colorado passed the Taxpayer Bill of Rights (or TABOR), limiting state spending growth to the increase in population plus inflation, California’s legislature was abandoning the GANN Amendment, a similar limit.

Says Poulson, “Over the period since TABOR was passed, Colorado has experienced one of the highest rates of economic growth in the nation, while California has experienced retardation in economic growth.”

Two states — Maine and Washington — have initiatives on their ballot this November that are very similar to Colorado’s TABOR. The special interest opponents to these measures, most notably government employee unions, have raised millions more than supporters. Soon voters will be pummeled with ads claiming that the sky will fall if there is any limit on state spending growth.

Of course, the fiscal sky has already fallen. Voters should support these measures as the best way to pick up the pieces.

This is Common Sense. I’m Paul Jacob.

Categories
tax policy

Visible Taxes, Invisible Support

There’s a lot of talk about the Value Added Tax and its various sister excises, like the Retail Sales Tax and the GST, or Goods and Services Tax. A lot of countries have one or more of these. They raise a lot of revenue, but require mounds of record-​keeping and can quickly become oppressive.

Economist David Henderson recently noted the strange fortunes of Canada’s GST. When it was imposed, it cost the party that sponsored it — the so-​called “Progressive Conservative” party — nearly everything. Canadians so loathed the tax that they punished the PCs by throwing them out of office — way out: Their representation in Parliament went from 295 seats to two.

Some repudiation, eh?

Henderson wryly notes that the Liberal Party, which picked up majority support, did not abolish the tax as promised. Are you shocked?

Nearly everyone feels the GST, nearly everyone pays it. One reason to support such a visible tax, Henderson says, “rather than less-​visible taxes is so that voters have a feel for the magnitude of the tax. But precisely because that’s true, they’ll punish the party that imposes it.”

Hey politicians — I have a better idea. Get rid of some less-​than-​visible spending. It would hurt the parties a lot less. And it really would solve the tight budget problem, making the need for a visible tax vanish.

This is Common Sense. I’m Paul Jacob.

Categories
ballot access initiative, referendum, and recall insider corruption tax policy

Ballot Box News

With all that’s going on in Washington, don’t forget: There’s a lot happening on state and local ballots. Consider these recent newsline items from Ballot Box News:

Miami-​Dade County Mayor Carlos Alvarez is under fire for giving big-​ticket raises to favored insiders while calling for steep budget cuts. A day after a poll found that 58 percent of registered voters favor the recall of Alvarez, another local mayor filed a lawsuit to undo controversial requirements that make it much more difficult to recall sitting politicians.

There’s a link to the rest of the story at the Miami Herald

.Republican lawmakers are lining up against a citizen initiative effort to impose stringent ethics guidelines on the Utah Legislature. Complained the state senate’s majority leader, “If there are people out there who have political intentions they will use this as a club time and time again.” 

Uh, sir, that would be the idea. Without people clubbing politicians on ethics, how can we root out corruption in politics? Can we trust you to do it, based on your good word as an incumbent?

Full story in The Salt Lake Tribune.

We’re told California’s cash-​strapped state government would be virtually wallowing in piles of cash if a proposed wealth tax makes it to the ballot. And is approved by voters. And survives legal challenge. I don’t support it. Tax-​the-​rich schemes are unjust, and don’t work.

But I do support BallotBoxNews​.com, where you can find out more about this proposed tax, and many other hot-​button issues.

This is Common Sense. I’m Paul Jacob.

Categories
tax policy

Re-​Kill the Death Tax

Next year, the federal death tax — otherwise known as the estate tax — will be phased out entirely. It will be gone. But it won’t stay gone.

This phase-​out was part of tax cuts Congress passed in 2001. The death of death taxes should have been permanent. After all, meeting the Grim Reaper is tough enough as it is. As you’re about to expire, do you really want to ponder how 55 percent of what should go to your heirs will be confiscated as soon as your coffin goes into the ground? It’s enough to make you want to skip dying altogether.

Unless Congress acts, come 2012 the death tax will pop back into life, as ravenous as it ever was at a full 55 percent. What will happen as the previous year draws to a close? In a Newsweek column archly entitled “Death, Republican Style,” Jacob Weisberg notes that rich elderly people will have an incentive to die by December 31, 2011. Their kids will have an incentive to “turn off respirators in time for the deadline.” Though morbid and sorta sordid, he has a point.

So what’s the solution? I mean, aside from vilifying the GOP for the political compromise leading to this end game? Weisberg is mute. But if his concern for the elderly is genuine, he could start by urging Congress’s Democratic majority to kill the death tax for good. Then we’d all want to live!

This is Common Sense. I’m Paul Jacob.

Categories
general freedom tax policy

Making the IRS Integral to “Health”

If a doctor who is supposed to help you get better keeps stabbing you with a knife instead, it may seem beside the point to focus on any particular wound. The whole stabbing process is wrong.

Democrats in Congress have found a way to duplicate this effect. Their evolving medical reform package is prolific in ways to attack our freedom. 

But remember: Some stab wounds may slice closer to the heart than others.

If the current majority government has its way, in the new healthcare regime we won’t simply be invited to cooperate. There are huge hunks of coercive power built into their system. Force. Not friendly reminders and advertising enticements.

Take a simple provision of their plan: Individuals who decline to sign up for approved medical insurance will be financially penalized. You might be ordered to forfeit 2.5 percent of your income above a certain level. What happens if you refuse to pay this fine? The IRS could swoop in and seize your assets. Eventually, you could end up in jail.

Today, we don’t have much privacy right when it comes to dealings with the IRS. But at least agents refrain from prying into details of our medical coverage. Under the new regime, though, the tax agency would directly monitor your insurance compliance, and give your tax info to health commissars.

Kind of makes you feel sick, doesn’t it?

This is Common Sense. I’m Paul Jacob.

Categories
tax policy

Connecticutting The Dots

Connecticut used to be one of the go-​to places for escaping state income taxes.

But in 1991, Governor Lowell Weicker hatched the novel idea of burdening Connecticut residents with the same direct tax on income with which Americans have been saddled in so many other states. Despite the deep unpopularity of his proposal, Weicker rammed it through. That meant sacrificing any chance at re-​election. But he was hailed as a hero by all fans everywhere of government bloat and flattened economies.

The Constitution State has indeed suffered a flatter economy in the years since. The Yankee Institute points out that since 1992, Connecticut businesses have hired no new workers on net. Even as the country added more than 20 million jobs. Over the last decade, Connecticut suffered a net loss of some 113,000 residents. If your tax policies tell productive people to get lost … they do.

Connecting the dots between higher taxes and stalled growth may be easy for most graduates of Economics 101. Even most politicians probably grasp the connection. But many just don’t care.

In 1991, residents were told that the income tax burden would never exceed 4.5 percent. But in 2001, it jumped to 5 percent. Now the current governor, Jodi Rell, wants to hike the top rate to 6.5 percent.

What the … Rell? Folks aren’t leaving the state fast enough for you?

This is Common Sense. I’m Paul Jacob.

Categories
initiative, referendum, and recall tax policy

Pity the Politicians?

In tough times, who get hit hardest? According to the Center on Budget and Policy Priorities, “[a]t least 39 states have imposed cuts that hurt vulnerable residents.”

Why? Well, states have been spending at increasing rates for years now. And then came the slump, with less income — and fewer sales — to tax. So of course state revenues plummet.

And politicians must force themselves to do the thing they hate most: Cut.

But, as Steve Chapman argues in his column, “A Hole They Dug for Themselves,” simply by increasing spending no more than the rate of inflation, they would have avoided this. Chapman insists, “governors and legislators might have prepared for drought.”

One thing Chapman doesn’t say is that this spending limit idea has been on many states’ tables for some time. It’s often called TABOR, or the Taxpayer Bill of Rights. Such measures constitutionally limit spending to the rate of inflation plus the rate of population increase. Only voters can break this spending cap.

But politicians hate such measures, oppose them for all they are worth.

So, we may pity the poor, but let’s not shed one drop of sorrow for the politicians.

And, if you live in Maine or Washington state, vote for the TABOR-​like initiatives that will be on the ballot this November. Help yourself, help the poor — by forcing politicians to spend as if things could change and tomorrow matters.

This is Common Sense. I’m Paul Jacob.

Categories
tax policy too much government

Nowhere to Run

Back in May, before partisan warfare in the New York state legislature temporarily stemmed the spate of bad legislation, the Democrats in that distinguished legislative body did the sort of thing Democrats do. Voted in a new tax.

Of course, Republicans often do the sort of thing Democrats do, too. When I say Democrats did it this time, I mean 32 Democrats voted in favor and zero Republicans.

The lawmakers passed a so-​called “Mobility Tax” on the residents of twelve counties to subsidize the Mass Transit Authority, which operates subways and buses in New York City. These include non-​borough counties like Orange County. On a map of New York counties, you’ll see Orange lies near the Big Apple. But few residents there make much use of MTA transportation services.

As one of many Orange County residents put it, “Thruway drivers pay to operate the Thruway. We don’t get to tax the people of Manhattan to keep tolls down. Yet we are being asked to subsidize the MTA even more whether we use it or not.”

Public transportation should be privatized. In any case, though, passengers should pay their own fares. Hike the charge for a subway ride to four dollars, if necessary, and let riders demand better management. But don’t go after the wallets of people in the towns next door.

This is Common Sense. I’m Paul Jacob.