Category: tax policy

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deficits and debt tax policy too much government

No Shock and Awe

Benjamin Franklin, Death and Taxes,

They’ve crunched the numbers and the shocking truth is . . . Democratic Presidential candidate Joe Biden wants to raise taxes and debt.

The word “shocking” needs quotation marks, of course, for sheer lack of any shock whatsoever.

Also not shocking is who pays.

You see, “80 to 90 percent of the total proposed tax increases in Biden’s plan would fall on the top five percent of earners,” according to the Committee for a Responsible Federal Budget. That is the target taxpayer cohort, anyway. Economists know a hidden truth: the incidence of a tax’s burden shifts. All taxes siphon off production, but — because production is engaged in for consumption’s sake — in the end consumers pay.

In politics, of course, the idea is not to acknowledge this, instead focusing on the targets, tempting voters to get on board with spending and taxing and borrowing just so long as some other (preferably non-voting) people pay. 

“While tax burdens would rise by 0.2 to 0.6 percent for most households, they would rise by 2.3 to 5.7 percent for the top 20 percent of earners and by 13.0 to 17.8 percent for those in the top 1 percent in 2021.” The Democrats would have the highest earners in America pay an extra “$300,000 per year” and call that a benefit . . . to those who would pay less.

Meanwhile, the “additional revenue that would be raised through Biden’s tax plan would only pay for a portion of his overall spending agenda.” It would take “$6 trillion more . . . to stabilize debt-to-GDP at today’s near-record levels.”

According to the CRFB, because of pandemic panic spending, and before any proposed Biden add-ons, “debt will grow from 79 percent of GDP before the crisis to 101 percent by the end of 2020 and 118 percent of GDP by 2030.”

Have our politicians set out to revise Ben Franklin’s maxim? There is nothing more certain than death and taxes — and debt.

This is Common Sense. I’m Paul Jacob.

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tax policy too much government

California Schemin’

California, Democrats, taxes,

Is California a failed state? It has an electric grid problem. And a vagrancy problem. Both of which stem from the bizarre ideological blind spots of a political class “benefiting” from the state’s high legislator/citizen ratio, which insulates politicians from feedback.

Driving them power mad.

And one form of madness flowers in political greed, hubris and overreach.

“A pack of Democratic lawmakers in California are proposing a wealth tax for the state’s richest citizens, forcing them to pay more essentially just for owning a lot of stuff,” writes Scott Shackford at Reason. “They also, amazingly, want the tax to follow Californians who flee the state in response, attempting to make them continue paying taxes on wealth that’s not even in the state.”

Rob Bonta, Oakland’s Democrat in the Assembly, says the Golden State needs more gold, and he has made a startling observation. Wait for it. “Rich people have money,” Shackford summarizes, and Bonta wants to take it. To expand services.

But surely service expansion is not only not the only option, it is often the worst option. 

Take the state’s rolling blackouts. Was that caused by not enough or really bad legislation? President Trump points his finger at the Democratic-controlled Assembly: “In California, Democrats have intentionally implemented rolling blackouts — forcing Americans in the dark. Democrats are unable to keep up with energy demand,” the president tweeted on Tuesday. But the New York Post identifies as a cause not “intentionally implemented” blackouts, but “inadequate transmission and an over-reliance on renewable energy and issues with natural gas plants during high heat.”

Bad policy. Not too few “services.”

And the proposal to tax the richest Californians — or former Californians — to pay for more disastrous programs? 

Hubris and greed.

Not Common Sense. I’m Paul Jacob.

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initiative, referendum, and recall tax policy

Extraordinarily Unusual

Tim Eyman

“It’s a government-on-government fight,” reports Seattle-based KOMO News, as the Pierce County Council voted 4-3 to provide assistance in defending Initiative 976 in court.

The ballot measure, which limits car license fees among other provisions, passed 53 to 47 percent statewide last month, including a whopping 66 percent affirmative vote in Pierce County. And — you guessed it — I-976 was immediately swarmed by life-devouring locusts — er, I mean, sued by “a handful of counties, cities, transportation agencies, and one transit rider.”

In short, many governments seek to undo a vote of the people . . . along with a lone citizen to serve as fig leaf.

Against only one government, Pierce County, now joining the voters.

Late last month, a judge in King County, one of only four counties (out of the state’s 39) to vote against I-976, issued a preliminary injunction blocking implementation of the initiative, while the case is being adjudicated.   

The voter-approved measure does have Attorney General Bob Ferguson lawyering on its behalf. But Mr. Ferguson has been engaged in a multi-year civil lawsuit against Tim Eyman, the sponsor of 976. The two aren’t friends. And the AG is no friend of lower taxes, either. No surprise, then, for Eyman to talk of “sabotage” and Ferguson’s mere pro forma defense: “he truly doesn’t want it to succeed.”

This isn’t a government-on-government fight, but governments-versus-voters. With the wonderful exception of Pierce County, where political representation still lives.

“This is the first time a government has ever actually done something to defend a citizen initiative,” remarked Eyman at a Tuesday news conference. 

“It is really extraordinarily unusual,” he added.

That’s how out-of-control government in our “democracy” is. 

This is Common Sense. I’m Paul Jacob.

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Tim Eyman

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initiative, referendum, and recall tax policy

My Favorite Control Group

Tim Eyman

Tim Eyman strikes again. 

In deep blue Washington State, the ballot measure activist celebrated another Election Day victory last week with Initiative 976, limiting vehicle taxes. Not to mention Referendum 88, whereby voters kept a ban on government use of racial preferences, enacted via an initiative Eyman had co-authored two decades ago.

And still, there were a dozen more issues on last Tuesday’s statewide ballot thanks to Mr. Eyman’s 2007 initiative, I-960, which mandates “advisory votes on taxes enacted without voter approval.” (Also thanks to state legislators, I guess, for racking up 12 new tax increases this year without bothering to ask voters!)

Yet, perhaps it matters not at all. Nearly two million votes cast on each of these measures? Three supported by a majority? Nine rejected? Two esteemed Evergreen State newspaper columnists pooh-pooh them as “meaningless.”

“The Legislature has never taken the voters’ advice when they say a tax should be repealed,” writes Spokane Spokesman Review columnist Jim Camden. 

That’s a failing of the Legislature, Jim,* not these advisory measures . . . which you seem to acknowledge when you write that these votes at least “provide a good control group for any experiment on the voters’ knee jerk reaction to higher taxes.”

If legislators cared to know. 

While dumping on the dozen measures as “an empty remnant of an earlier initiative,” The Columbian’s Greg Jayne notices that “their presence on the ballot this year reminded voters, over and over again, of the Legislature’s spendthrift ways.”

Helping create an anti-tax mood that spurred support for I-976.

Not bad for being meaningless.

This is Common Sense. I’m Paul Jacob.

* I use his first name because I know Mr. Camden from decades ago when he was a reporter covering House Speaker Tom Foley, who after suing to overturn the 1992 citizen initiative for term limits became the only Speaker defeated for reelection since the Civil War. 

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Tim Eyman

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initiative, referendum, and recall tax policy

Blue Colorado Big Spenders

Colorado, elections, taxes, Bruce,

“The Trump years may have cemented Colorado’s blue-state status — time will tell,” writes Alex Burness in the Denver Post, “but voters in the Centennial State continue to hold a hard line on anything that has even a whiff [of] new tax.”

Burness is talking about Proposition CC, a measure placed on Tuesday’s ballot by the state’s Democratic-controlled legislature, which would have allowed state government to keep and spend $37 million annually coming into government coffers over the state’s constitutional spending cap, rather than refunding those dollars to taxpayers as required by the Taxpayer Bill of Rights passed back in the 1990s.

The elite supporters of Proposition CC devoted more than $4 million to promoting the measure, outspending opponents better than two-to-one and arguing that government desperately needed the money for education and transportation. Opponents cried foul over the official ballot summary voters read, which began with the words “Without a tax increase . . .”

 “But the measure lost,” Burness informs, “and it wasn’t close.”

“The measure’s failure amounts to a significant victory for supporters of the Taxpayer’s Bill of Rights,” Colorado Public Radio reports. “That constitutional amendment requires voter approval for all tax increases, sets a revenue limit for every government in the state and requires any surpluses be returned to taxpayers.”

“Who’s in charge?” TABOR author Douglas Bruce asked years ago. “We, the people, who earn the money, or the politicians who want to spend it?”

The answer from supposedly blue-leaning Colorado voters was unequivocal.

This is Common Sense. I’m Paul Jacob.

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Colorado, elections, taxes, Bruce,

Photo credit: Pictures of Money

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initiative, referendum, and recall tax policy

The Legislature That Couldn’t Tax Straight

Tim Eyman, Senate Bill 5224, taxes, vote, democracy,

“If you lost count of how many new and higher taxes state lawmakers passed this year,” begins Jerry Cornfield’s recent column in the Everett Herald, “it was 12.”

Cornfield doesn’t appear too distressed about the tax hikes, however, worrying instead that Evergreen State voters will be “awash in tax advisory measures this fall.”

That’s because for every tax increase the Washington State Legislature enacts without putting it to a vote of the people of Washington, an advisory vote is mandated by Initiative 960, passed by voters back in 2007.

So 12 tax increases = 12 tax advisory votes. 

“We wouldn’t be talking about advisory votes and providing Eyman a platform for politicial [sic] ministering,” Mr. Cornfield complains, “had Democratic lawmakers gotten rid of them by passing Senate Bill 5224.”

Seems odd somehow that a newspaper columnist would be berating politicians for not passing a law to silence voters regarding tax hikes. Democrats could have done so without a single Republican vote. SB-5224 did pass the Senate, but it was blocked in the House by the Democratic Speaker — “democratic,” thankfully, in more ways than one.

Eyman is Tim Eyman, the state’s anti-tax initiative leader. His group, Voters Want More Choices, spearheaded Initiative 960, which from 2008 to 2018 required 19 tax advisory votes. Voters have expressed opposition to 12 of the 19 tax increases passed by the legislature — 63 percent — and support for seven. 

“It’s a tax increase report card,” explains Eyman, “and the Legislature this year gets an F.” 

A grade that was certainly earned.

This is Common Sense. I’m Paul Jacob.

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Tim Eyman, Senate Bill 5224, taxes, vote, democracy,

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subsidy tax policy

The Truth of Tax Privileges

Tony Gehrig, Dave Piepkorn, Caldevron, taxes,

In Fargo, North Dakota, a company called Aldevron applied to the city council for a tax exemption. If given, it would spare the company from handing $4.6 million dollars to the city government over the next ten years.

Now, Aldevron isn’t just a company with a name seemingly out of a sci-fi movie. It is science-fictional in its mission, providing “high-quality plasmid DNA, proteins, enzymes, antibodies, and other biologicals to help our partners achieve ground-breaking science,” and so on.

Sounds very interesting. But is it $4.6 million interesting?

That is subjective. A more objective question was asked of the company’s representative by Commissioner Tony Gehrig: “If you didn’t get the incentive would you still expand?”

The answer was revealing: yes.

That is when another commissioner, Dave Piepkorn, got a bit peeved.

He “accused Gehrig of ‘bitching’ about the subsidies,” explains Rob Port of the Say Anything blog. Then Piepkorn went on to “bitch” . . . about Gehrig. “It really bothers me when he puts words in people’s mouths.”

So Commissioner Piepkorn asked Aldevron’s rep if the company would go somewhere else sans the special privilege.

The company man, looking a tad uncomfortable, as Port notes, said no. Businesses have to take a long view of their relationships with local government, and tax breaks are just one element in overall “friendliness.”

After all, businesses have to go somewhere.

Rob Port concludes that “the subsidies occur because they’re expected, not because they’re needed.” 

Fargo’s voters might consider an initiative to take away politicians’ ability to make creative use of their taxing authority.

Perhaps while voting out Piepkorn.

This is Common Sense. I’m Paul Jacob.

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Tony Gehrig, Dave Piepkorn, Caldevron, taxes,

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Popular tax policy term limits

Terms for Taxes

tax man, taxes, Tim Eyman, term limits,

Years ago, I dubbed Tim Eyman “America’s #1 freedom fighter,” and how does he repay me? Washington State’s anti-tax crusading initiative guru has gone and stolen my bread-and-butter issue, term limits . . . and married it up with another one of his tax initiatives. 

He’s calling Initiative 1648: Term Limits on Taxes. 

“This measure would require state tax increases to expire after one year unless approved by a majority vote of the people,” informs the official ballot title, “and immediately terminate any tax increases imposed in 2019 without such approval.”

Did someone say “tax increases”? 

“They went absolutely bonkers this legislative session,” Eyman told radio host Lars Larson recently. “There were 11 tax increases; they totaled over $27 billion over the next ten years. And there’s just no checks and balances.”

Speaking with Dori Monson of KIRO Radio, he noted that “all of them were passed without a vote of the people. This initiative says whenever they raise taxes without a vote of the people, we’re going to put it on a strict time limit.”

But with a July 5th deadline, supporters have less than two weeks left to gather the 320,000 voter signatures required on the petition.

It is terrible that Evergreen State voters can’t term-limit their state legislators directly. But in 1998, the state supreme court struck down a term limits initiative passed by voters, ruling that a constitutional amendment was required — something only legislators can propose. 

Now, thanks to Mr. Eyman, at least voters can slap term limits on their legislators’ tax increases. 

Still, he stole the idea from me.

This is Common Sense. I’m Paul Jacob.

tax man, taxes, Tim Eyman, term limits,

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education and schooling initiative, referendum, and recall tax policy

Taxing Panicsville

Earl G. Jaques

There is a big problem with Delaware school districts asking voters for additional tax money via ballot referendums. You see, sometimes the people don’t vote the way school officials and politicians want.

Have no fear: Rep. Earl Jaques (D-Glasgow) has authored House Bill 129 to solve this thorny problem. 

“This bill creates a mechanism,” its official summary reads, “by which school boards may increase funds for a school district both with and without a referendum.” 

Meaning, of course, without a referendum . . . since current law requires a public vote. 

“That way, [school districts] know the money is there if they need it, and they don’t abuse it because they know it’s there,” explained Jaques. “The problem with the referendum system is that they have to ask for more than they actually need, because they know it’s going to be a long time before they can come back.”

“Despite his assurances that the system would not be abused,” the Dover Post reports, “technically, school districts could raise taxes by 2 percent each year.” Or by any increase in the Consumer Price Index, whichever is higher.

Inexplicably, three stories — in the Dover Post, Newark Post and Delmarva Now — told readers it was the “lower” of the two. The bill clearly says the “higher.” Odd that media outlets would not grasp the ever-so-subtle difference between the words “higher” and “lower.”

“Everybody’s in ‘Panicsville,’ but it’s really not that way at all,” offered Jaques. “We, my colleagues in the legislature and I, could raise your income tax right now, and what’s your recourse? Vote us out at the next election.”

Excellent advice.

This is Common Sense. I’m Paul Jacob.

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Earl G. Jaques

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folly Popular tax policy too much government

A Fake Mystery

Gavin Newsom, Governor, California, gas, tax, prices, folly,

California’s new top banana is playing politics the old-fashioned way: passing the buck.

Last week Governor Gavin Newsom directed the California Energy Commission (CEC) to look into the state’s higher-than-average gasoline prices.

“Independent analysis suggests that an unaccounted-for price differential exists in California’s gas prices and that this price differential may stem in part from inappropriate industry practices,” he wrote in an official letter to the CEC.  “These are all important reasons for the Commission to help shed light on what’s going on in our gasoline market.”

Ah, shed light!

We are not talking about the bulb in your outbuilding.

Californians understandably grumble about having to pay higher taxes than elsewhere in the U.S. So Newsom pretends to suspect “inappropriate industry practices.” But what is inappropriate is Newsom’s directive to the CEC. As Christian Britschgi drolly informs us at Reason, Newsom, while lieutenant governor, had “supported a 2017 bill increasing the state’s gas taxes,” which looks like all we really need to know. Raise taxes, and businesses tend to increase prices rather than eat the extra cost. Higher gas prices are the result of higher taxes.

Duh.

But there’s more.

“When running for governor in 2018,” Britschgi explains, “he opposed a ballot initiative that would have repealed that same increase.”

So, is Newsom truly clueless of the obvious?

Hardly. And neither are “17 legislators who voted for the tax hike” who joined the governor in “wanting answers to this difficult headscratcher.” They are doing what pols usually do: deflect; misdirect; blame others . . . hoping that voters don’t pay close enough attention, or remember recent history. And busy people often do not.

Finding a bogeyman helps, too.

This is Common Sense. I’m Paul Jacob.

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Gavin Newsom, Governor, California, gas, tax, prices, folly,

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