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When you argue against a VAT, Red Light Cameras, & Toll Roads…

June 1, 2010 By 6 Comments

…you are guaranteeing steep income tax increases.

So grow up.

Nothing cranks me up more than the Free Market Movement’s avoiding the necessary debate on swapping good taxes for bad. I hate taxes as much as the next guy, but until someone in the free market movement starts fighting spending and borrowing, taxes are here to stay. Not only that, but they are also guaranteed to climb.

Here is some tough medicine for the Free Marketers.

  • Every time you fight a Red Light Camera, you are keeping property taxes from going down.
  • Every time you fight a cigarette or liquor tax increase, you are keeping income taxes from going down.
  • Every time you blather on about hating toll roads, you are keeping income and gas taxes high.

    • Are you starting to get it? Now that I have your attention (and you are undoubtedly preparing to flame me in some comment), let me clarify the issue with some general, but unassailable, facts.

  • If you aren’t fighting spending, you are FOR increasing taxes.
  • At the state level, “pension guarantee clauses” and federal contract law operate to lock in promises made. Spending is going up, no matter what.
  • At the federal level, Medicare, Medicaid, the new health care bill, and Social Security will force an increase in spending, increase in debt (greater deferred spending) or the printing of money. Those are your options, and all involve steep tax increases in one form or another.
  • Consumption and sin taxes are superior to income/production taxes
  • User fees (tolls) are superior to income taxes

    • With all that in mind, why is the conservative/libertarian movement, along with the smarter people in the Republican Party, failing to make the case for tax swaps that entail the conversion from Income, Payroll, and Corporate Income tax to a consumption-based system of taxation.

    The only negative political factor that can be associated with such a policy is the impact on the poor. This is easily addressed by the creation of a yearly stipend for every US citizen. The stipend, in turn, can be used to individualize the entitlement programs that are destroying our nation’s finances.

    We could, for example, transition away from income taxes all together, while providing citizens with the means to pay for market-based health and retirement systems. This allow for the eventual devolution of Medicare and Medicaid, along with Social Security.

    Placed in this context, we should be considering gas, BTU, consumption, and sin taxes as complete replacements for Income and Social Security taxes. If we get our swap, we should even consider a VAT/National sales tax. This is good policy.

    And again, whether you are Tea Party Activist or a Free Market Think Tank employee, I have some advice for you. Sitting in a corner, with your hands over your ears, shouting, “I’m not listening to anything you say about taxes” isn’t an economic policy. It’s only a guarantee that you’ll get all those tax increases, and then some.

    We are in a position to make massive free market gains in the next few election cycles, providing we deal with fiscal reality in an intellectually honest manner. We can force the spending cuts that will yield tax cuts in the future. We can swap good taxes for bad ones. Lastly, if we do it right, we can individualize the welfare state through scholarships, stipends, and individual health and retirement accounts.

    Filed Under: 2010 Elections, Tax Policy, The FairTax Tagged With: , ,

    With Christie, Pawlenty and Daniels, GOP points way to future

    May 19, 2010 By Leave a Comment

    One of my favorite stories from my travels in Illinois Politics is when one of the “Fab Five” told me, “Bruno, there’s no constituency for spending cuts.”

    This senator apparently never thought to create such a constituency, or perhaps thought that it was impossible to do so. He may have been right, but the fact is that there is a large constituency for spending cuts right now.

    Of course, the constituency for spending increases will always be with us, but the current climate supports cutting and freezing spending, and we should do all we can to build that support. Chris Christie, Mitch Daniels, and now Tim Pawlenty, have shown that you can cut and freeze state spending.

    It’s time to start talking about permanent and hard caps on spending at the state and municipal level. Once you cap spending, you cap taxes. If you vote for spending increases, you are voting for tax increases.

    Tim Pawlenty budgets with an eye on 2012

    Minnesota Governor Tim Pawlenty’s final budget, completed early Monday morning over the protests of angry Democrats and passed in a special session of the state legislature later in the day, positions the 2012 Republican presidential hopeful as the embodiment of conservative governance in hard economic times.

    Pawlenty appears to have run the table on the Democratic majorities in both of the houses of the legislature, forcing them to drop plans for new surcharges and scrap their top priority, an expansion of federal and state-funded health care for some of the state’s poor. They also enacted spending cuts that a court recently ruled Pawlenty could not make himself.

    He will complete his two-term tenure at the end of this year having fulfilled his pledge not to raise taxes, with his approval ratings in positive territory, and having largely avoided the pragmatic compromises that often bedevil governors in polarized party primaries. His success gives him the accomplishments to match his conservative rhetoric, and set a high bar for other ambitious governors facing budget crises of their own in this lean year.

    If Mitch Daniels decides not to run for President, Tim Pawlenty is the next best thing.

    Filed Under: Bankrupting Illinois, Budget & Spending - State, Pension Greed Tagged With:

    Andrzejewski has local spenders running scared

    January 20, 2010 By Leave a Comment

    Boy, you offer up specifics (instead of platitudes) regarding real spending cuts, and the spending interests’ noise machine cranks up big time.

    Local officials fear Andrzejewski tax plan

    Hinsdale businessman Adam Andrzejewski said if elected governor he would reduce or eliminate “revenue sharing to local municipalities,” which could include the state withholding local government’s portion of the state’s income tax. The state currently shares one-tenth of income tax revenue with local governments, which totaled nearly $1.2 billion in fiscal year 2009.

    “If you look at it and peel back the layers on it, that would be the single largest property tax increase in the state’s history. You’re going to push the state’s problems on municipalities and local taxpayers,” said Mark Fowler, executive director Northwest Municipal Conference, which represents area governments. “This isn’t money that creates a slush fund for municipalities.”

    Leaving aside the fact that “slush fund” is a good word for Illinois’ state and local finances, Mr. Fowler’s words expose the mindset of those in the “Government/Association complex.” Here, Mr. Fowler, like many with a pro-government mindset, shows that he can’t even conceive of spending cuts. Like the pundits in Springfield, he probably wants all of us to think that “there is no place left to cut.” He merely assumes a property tax increase is the answer.

    Mr. Fowler either ignores, or doesn’t know, that Adam Andrzejewski is running on hard property tax caps as well.

    Here is the truth, everyone. You have 6 insider candidates offering platitudes, while one outsider is proposing meaningful spending cuts. Ending municipal revenue sharing isn’t an easy thing to propose, but Adam put it on the table as a way to prevent tax increases that would send more businesses out of Illinois.

    In this specific case, Andrzejewski is trying to balance the budget, and municipalities, many of which have ramped up spending and taxes over the last 10-20 years, are crying foul at the prospect of having to tighten belts. These are tough times, but the government’s spending culture simply assumes that the taxpayers should foot every bill. That isn’t right, and it isn’t sustainable.

    State and Local Governments have had a 15-25 year run up on spending increases. The gravy train is over. It is time for spending cuts.

    Filed Under: 2010 Elections, Budget & Spending - State, Property Tax Revolt Tagged With: , ,