Category: tax policy

Categories
initiative, referendum, and recall tax policy

They Call It “De-​Brucing”

Colorado’s constitutional amendment dubbed the Taxpayer Bill of Rights, or TABOR, has made it difficult for politicians to tax and spend like they want. 

So politicians engage in all sorts of weird strategems.

Take “de-​Brucing.” TABOR’s author is Doug Bruce. TABOR allows voters to make exceptions to the law’s basic limits on spending increases and taxes. So all but four of Colorado’s 178 school districts have voted to “de-​Bruce” — that is, to allow more spending, more taxes, than TABOR’s formula would otherwise allow.

In this context, Gov. Bill Ritter worked hard promoting a 2007 law to freeze tax rates. This freeze was designed not to limit increasing tax revenues, but to shore up the pre-​TABOR rate of increase. It passed. 

What the freeze did was de-​Bruce the whole state, even those four school districts that had repeatedly and enthusiastically upheld tax rate reductions created by TABOR.

And now the state supreme court has decided that Ritter’s legal maneuver is just hunky dory.

In Colorado, voters engage in lawful constitutional revisions, and politicians react with obvious unconstitutional law … and are backed up by the highest court. So much for constitutionality.

If I lived in Colorado, I’d be voting not to “de-​Bruce,” but to “de-​Ritter” … and be thinking about term limits for judges.

This is Common Sense. I’m Paul Jacob.

Categories
tax policy

Howard Jarvis Must Be Growling In His Grave

The Howard Jarvis Taxpayers Association is getting a bum rap.

The organization is named after fiery tax-​cut advocate Howard Jarvis. Jarvis authored Proposition 13, the California tax limitation measure approved in 1978 by a two-​to-​one margin.

In recent months, like everywhere else, California has suffered economically. And now the Howard Jarvis Taxpayers Association is being angrily berated, for nevertheless still advocating lower taxes for besieged taxpayers.

The Sacramento Bee declares that there’s a “difference between protecting taxpayers and rigidly opposing all new tax increases, regardless of the state’s finances.” Watchdogs who commit the latter become “demagogues,” according to the editorial writers at the Bee. The Howard Jarvis folks are supposedly “charting a course to disaster.”

Oh, I don’t think so. I’m happy when foes of ever-​larger tax burdens stick to their guns.

The Bee blithely ignores the true culprit here, asserting that in recent years, tax revenues have “plunged” in California as “deficits have deepened.”

Recent tax receipts are down slightly compared to a year ago. But for years, state government spending has skyrocketed, which the Bee says nothing about. The state budget was $56 billion in 1998. In 2008, $131 billion.

Here’s a suggestion, one the late Howard Jarvis would have liked. Cut spending.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets national politics & policies tax policy

State Violence in Vladivostok

While our president was finagling his way to support two out of three of the Big Three automakers, folk in Vladivostak were protesting Vladimir Putin’s new high tariffs on foreign-​made used automobiles. As many as 6,000 protesters on Russia’s Pacific Coast took to the streets, some even calling for Putin’s ouster.

Used cars are a big deal on the eastern end of the Russian empire. Over 200,000 people in and around Vladivostok work on — or professionally trade — used cars. The used car business heavily undergirds the economy of the area … just across the East Sea from Japan. (I add this topographical note in case you forgot your grade school geography lessons.)

Not only did Putin insist on keeping the high tariffs, he sent in extra police to beat heads. The police attacked not only protesters, but journalists, too — without regard for nationality.

On the Sunday before Christmas, smaller protests were held around the vastness of Russia, including Moscow.

Don’t dismiss the tariff as “mere” economic policy — Putin sure doesn’t. One protester went on record, saying, “First, we have been deprived of our right to elect, now they are taking away our right to choose cars.”

An important lesson for America, too. Government policy skews our ability to choose. Favors to local business (whether by subsidy or tariff) decrease our ability to contract to get what we want. Which, often, includes imports.

This is Common Sense. I’m Paul Jacob.

Categories
tax policy

You Can’t “Give” Me What’s Already Mine

A mooching relative borrows $500 from you, wastes it all in a drunken spending spree, never pays you back.

Eventually, he loftily hands you a fiver.

He says, “I don’t even know why I give you this money, but I’m a nice guy. Use this gift to create jobs or something, okay?”

In response, do you a) Punch him in the nose; b) Punch him in the nose; c) Punch him in the nose; or d) Thank him for the gift.

We all know which three of these four options is the correct answer. Yet, again and again in tax cut discussions, people talk as if reducing the amount of money the IRS grabs from someone is tantamount to “giving” that person something.

Political commentator E.J. Dionne recently repeated this fallacy. “For years,” he wrote, “Republicans have argued that the way to help struggling working people is to give more money to the wealthy.” Dionne adds that Obama “is saying that we should cut out the middleman and help working people directly.” And Dionne thinks this a good idea.

So, why not just grab all the money the wealthiest people earn and divide it amongst the have-​nots? Sure, this would kill the economy. But at least the terrible “middlemen,” the producers who make a complex economy possible, will be cut out of the loop.

An accomplishment we can all cheer as we starve to death.

This is Common Sense. I’m Paul Jacob.