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Archive for the ‘States’ Category

There’s an old saying that states are the laboratories of democracy. But since I’m a policy wonk, I focus more on the lessons we can learn from the states about public policy.

Such as the importance of limiting the destructive nature of taxes.

Such as the economic benefits of not having an income tax.

Such as the horrible consequences of adopting an income tax.

Such as the negative effects of excessive compensation of bureaucrats.

Such as better job creation in states with less government.

But it’s always good to have more data and evidence.

So I was very interested to see that the Mercatus Center at George Mason University has a new report that ranks states based on their fiscal solvency.

Here are some of the details.

Budgetary balance is only one aspect of a state’s fiscal health, indicating that revenues are sufficient to cover a desired level of spending. But a balanced budget by itself does not mean the state is in a strong fiscal position. State spending may be large relative to the economy and thus be a drain on resources. …How can states establish healthier fiscal foundations? And how can states guard against economic shocks or identify long-term fiscal risks? Before taking policy or budgetary action, it is important to identify where states may have fiscal weaknesses. One approach to help states evaluate their ongoing fiscal performance is to use basic financial indicators that measure short- and long-run fiscal position.

Here are some of the findings.

The five dimensions (or indexes) of solvency in this study—cash, budget, long-run, service-level, and trust fund—are…combined into one overall ranking of state fiscal condition. …States with large long-term debts, large unfunded pension liabilities, and structural budgetary imbalances continue to hover near the bottom of the rankings. These states are Illinois, New Jersey, Massachusetts, Connecticut, and New York. Just as they did last year, states that depend on natural resources for revenues and that have low levels of debt and spending place at the top of the rankings. The top five states are Alaska, North Dakota, South Dakota, Nebraska, and Florida.

And here’s a map so you can see the rankings of each state. Dark green is good and yellow is bad.

I’m shocked and amazed to see California, Illinois, and New York near the bottom of the list.

Here’s the same information, but in a table so you can see the specific scores for each state.

So what should we learn from these rankings?

According to an editorial from Investor’s Business Daily, there are some very obvious lessons.

What do the most fiscally sound states have in common? Good weather? Oil? Blind luck? Or is it conservative policies such as keeping taxes low, regulations reasonable and spending under control? …There’s only one factor these fiscal winners and losers share in common. And that’s their political leanings. …if you look at the 25 best-performing states, only three could be considered reliably liberal. …There’s only one factor these fiscal winners and losers share in common. And that’s their political leanings. Of the top 10 states in the Mercatus ranking, just two — Florida and Ohio — voted for the Democratic presidential candidate in the past four elections, and just one — Montana — has a Democratic governor. Even if you look at the 25 best-performing states, only three could be considered reliably liberal.

Now let’s shift from policy lessons to political implications. There are several governors and former governors running for President.

Based on the Mercatus ranking, can we draw any conclusions about whether these candidates are in favor of taxpayers? Or do they support big government instead?

We’ll start with the current governors.

Kasich – Ohio ranks surprisingly high on the list, particularly given the Ohio governor’s expansion of Obamacare in the state. Maybe the state’s #7 ranking is due to fiscal restraint by his predecessors.

Christie – New Jersey ranks low on the list, and this isn’t a surprise. The relevant question is whether Christie can argue, based on some of the fights he’s had, that the state legislature is an insurmountable impediment to pro-growth reforms.

Jindal – The governor of Louisiana has proposed some big reforms, but the state’s #35 ranking doesn’t give him any bragging rights on fiscal policy (though the state is leading the way on education reform).

Walker – Thanks to his high-profile fight with unionized bureaucrats, Walker has a very strong reputation. But his state doesn’t rank very high, and he can’t blame the legislature because it’s GOP-controlled as well. But perhaps the low ranking is a legacy of the state’s historically left-wing orientation.

What about former governors?

Well, there’s probably not much we can say because we don’t have long-run data. There was a similar Mercatus study last year, but that obviously doesn’t help with the analysis of governors that left office years ago.

Nonetheless, here are a few observations.

Bush – I’m very suspicious of politicians who express an openness to tax hikes, and Bush is in that group. But he did govern Florida for a couple of terms and never flirted with imposing an income tax. And former governors, particularly from recent history, presumably can take some credit for Florida’s relatively high ranking.

Pataki – Since New York is one of the worst states, Pataki has guilt by implication. But he did lower a few taxes during his tenure, and you also have the same issue that exists with Christie, which is whether a governor should be blamed when the state legislature is hostile to good policy.

Perry – It’s hard to argue with the success Texas has enjoyed in recent years, and Perry (like Bush) never even hinted at the imposition of a state income tax. Though the #19 ranking shows that there are issues that should have been addressed during Perry’s several terms in office.

Huckabee – There aren’t many conclusions to draw about Arkansas and Huckabee. He’s been out of office for a while and the state is in the middle of the pack.

The bottom line is that the Mercatus study is very helpful in identifying well-governed (and not-so-well-governed) states, but the newness of the project means we can’t make any sweeping statements about governors because of limited data.

Fortunately, the Cato Institute for years has been publishing a Report Card that grades governors based on fiscal policy. So fans (or opponents) of different candidates can peruse past issues to see the degree to which governors pushed policy in the right or wrong direction.

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Since I’m a bit old-fashioned, I think polygamy is rather weird.

And it would also be a practical nightmare. Thinking about it from a guy’s perspective, imagine having to remember multiple birthdays and anniversaries?

Not to mention dealing with a more complicated approval process if you want to get permission to join another softball league or take an out-of-town trip!

To be fair, polygamy could also mean one wife and multiple husbands, but what woman would want to subject herself to that burden?!?

She wouldn’t even know who to blame if she found the toilet seat in the up position.

But let’s look at the issue from a more serious perspective, especially because of the Supreme Court’s recent decision on gay marriage.

In a column for Politico, Fredrik deBoer argues that polygamists should also be allowed to marry.

Welcome to the exciting new world of the slippery slope. Following on the rejection of interracial marriage bans in the 20th Century, the Supreme Court decision clearly shows that marriage should be a broadly applicable right… Where does the next advance come? The answer is going to make nearly everyone uncomfortable: Now that we’ve defined that love and devotion and family isn’t driven by gender alone, why should it be limited to just two individuals? The most natural advance next for marriage lies in legalized polygamy.

Yes, he’s serious.

…the moral reasoning behind society’s rejection of polygamy remains just as uncomfortable and legally weak as same-sex marriage opposition was until recently. …If my liberal friends recognize the legitimacy of free people who choose to form romantic partnerships with multiple partners, how can they deny them the right to the legal protections marriage affords? Polyamory is a fact. People are living in group relationships today. The question is not whether they will continue on in those relationships. The question is whether we will grant to them the same basic recognition we grant to other adults: that love makes marriage, and that the right to marry is exactly that, a right. …the notion that procreation and child-rearing are the natural justification for marriage has been dealt a terminal injury.

He makes a very good point that polygamous relationships exist, regardless of whether they’re legally recognized.

But should they get some form of legal recognition? Mr. deBoer says yes, and asserts that polygamists should be allowed to marry, while being careful to argue that the slippery slope should be limited.

…mutually-informed consent explains exactly why we must permit polygamy and must oppose bestiality and child marriage. Animals are incapable of voicing consent; children are incapable of understanding what it means to consent. In contrast, consenting adults who all knowingly and willfully decide to enter into a joint marriage contract, free of coercion, should be permitted to do so, according to basic principles of personal liberty.

And here’s his bottom line.

…many progressives would recognize, when pushed in this way, that the case against polygamy is incredibly flimsy, almost entirely lacking in rational basis and animated by purely irrational fears and prejudice. …The course then, is clear: to look beyond political convenience and conservative intransigence, and begin to make the case for extending legal marriage rights to more loving and committed adults. It’s time.

But maybe “it’s time” for a different approach, and not merely because the marriage penalty might be enormous in a polygamous marriage.

Before looking at an alternative to government-sanctioned marriage for polygamists, let’s ask ourselves a weighty philosophical question. Is it possible for good things to happen for the wrong reason?

Consider what’s happening in Alabama, where the state senate has voted to abolish government-granted marriage licenses.

In Alabama, resistance to same-sex marriage continues.  …we have legislation making its way through the house right now that could get rid of the entire institution of marriage as we know it in Alabama. Right now, if you want to get married you go to the courthouse and the probate judge gives you a marriage license. Attorney Jake Watson explains, “[SB377] does away with that and requires parties to enter into a contract and file it at the courthouse, as I understand it.” …The bill passed the Senate by a vote of 22-3. It’s now in the House.

The politicians presumably took this step because they don’t want gay marriage rather than because of libertarian principles.

But isn’t this the ideal outcome, even if the motivating force is hostility to gay couples? After all, why should the government have any role in sanctioning a marriage? In think that’s the right question whether we’re talking traditional marriage, gay marriage, or polygamous marriage.

Wouldn’t it be interesting if Alabama showed up the path forward, albeit unintentionally?

Sort of reminds me of how the Democratic Party in Virginia had a campaign of “massive resistance” to school integration during the civil rights era. Motivated by racism, the state government even flirted with a voucher system.

That’s odious, but imagine if vouchers had been put in place 50-60 years ago for a bad reason and had developed today into a model for better schools at lower cost? One that was especially advantageous to minority students! The old-time segregationists would be rolling in their graves.

Returning to the marriage issue, it’s also worth noting that there are additional benefits to getting government out of the marriage business. Churches would not face any pressure to alter their beliefs. Baptists could stick to traditional marriage, Unitarians could allow gay marriage, and Mormons (if they wanted to be retro) could allow polygamy.

Heck, maybe we could even allow statists to somehow marry government. Elizabeth Warren and the IRS would make a great couple!

And once we solve all those issues, all that remains is convincing people that they should find bakers and photographers without using coercion.

P.S. If the government was out of the business of marriage, that would eliminate an excuse for wasteful and ineffective pro-marriage spending by governments.

P.P.S. For those who appreciate humor, there are good gay marriage one-liners among the rest of the jokes you can peruse here, here, and here.

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If you’re a libertarian or a small-government conservative, it’s quite likely you believe both these statements.

  1. Instead of picking winners and losers with special preferences and penalties, the tax code should be simple and fair, treating all economic activity similarly.
  2. Anything that reduces revenue to government is a good thing, and it’s especially good if the net result is to improve public safety by expanding gun ownership.

But what happens if these two statements are in conflict?

This isn’t a hypothetical question. As reported by Politico, there’s legislation in Louisiana to have a special three-day “tax holiday” on purchases of selected products, including guns and ammo.

Louisiana’s state legislature decided Tuesday to eliminate a tax holiday for hurricane equipment and school supplies, but keep one for guns and other hunting tools. In a 7-2 vote, the Louisiana Senate’s Committee on Revenue and Fiscal Affairs decided that for a three-day weekend at the beginning of September the state would eliminate its sales tax on firearms, ammunition, knives and ATVs. …Ultimately, three Democrats voted with four of their Republican colleagues to keep the tax holiday for hunting while eliminating the other two.

Is this a good idea?

I’m conflicted. As a fan of the flat tax, I obviously don’t want government to micro-manage the economy with back-door industrial policy in the tax code. And I’ve also written that tax holidays are a less-than-ideal way of reducing taxes. So this suggests that I’m against the Louisiana proposal.

But on the other hand, I’m an advocate of “starve the beast,” which means I support policies that will shrink the amount of revenue controlled by politicians. And I also strongly support the Second Amendment and want safer communities, so I like the idea of expanded gun ownership.

So how would I have vote if (Heaven forbid!) I was a Louisiana legislator?

I guess I would vote yes. Based on the limited information in the article, the proposal is a pure tax cut. So while I don’t like loopholes, I’ve also stated that I only want to eliminate such preferences if all the revenue was used to lower tax rates.

So the bottom line is that I would oppose the policy if the holiday was financed by an increase in the overall sales tax rate (similarly, I would support getting rid of the holiday as part of a proposal to lower the overall sales tax rate). But since such tradeoffs don’t apply, I would grudgingly offer my support (especially since I know the plan would offend anti-gun statists such as Michael Bloomberg).

P.S. We’ll add this post to my collection of libertarian quandaries.

P.P.S. Since we have a gun-related topic, I can’t resist sharing this example of pro-Second Amendment propaganda.

By the way, if you disagree with the message in this image, please take this IQ test for criminals and liberals and reconsider your views.

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Every so often, I get asked why I’m so rigidly opposed to tax hikes in general and so vociferously against the imposition of new taxes in particular.

In part, my hostility is an ideological reflex When pressed, though, I’ll confess that there are situations – in theory – where more taxes might be acceptable.

But there’s a giant gap between theory and reality. In the real world, I can’t think of a single instance in which higher taxes led to a fiscally responsible outcome.

That’s true on the national level. And it’s also true at the state level.

Speaking of which, the Wall Street Journal is – to put it mildly – not very happy at the tax-aholic behavior of Connecticut politicians. Here’s some of what was in a recent editorial.

The Census Bureau says Connecticut was one of six states that lost population in fiscal 2013-2014, and a Gallup poll in the second half of 2013 found that about half of Nutmeg Staters would migrate if they could. Now the Democrats who run the state want to drive the other half out too. That’s the best way to explain the frenzy by Governor Dannel Malloy and the legislature to raise taxes again… Mr. Malloy promised last year during his re-election campaign that he wouldn’t raise taxes, but that’s what he also said in 2010. In 2011 he signed a $2.6 billion tax hike promising that it would eliminate a budget deficit. Having won re-election he’s now back seeking another $650 million in tax hikes. But that’s not enough for the legislature, which has floated $1.5 billion in tax increases. Add a state-wide municipal sales tax that some lawmakers want, and the total could hit $2.1 billion over two years.

In other words, higher taxes in recent years have been used to fund more spending.

And now the politicians are hoping to play the same trick another time.

Apparently they don’t care that they’ve turned the Nutmeg State into a New England version of Illinois.

…the state grew a scant 0.9% in 2013, the last year state data are available. That was tied for tenth worst in the U.S. The state’s average compounded annual growth for the last four years is 0.42%. Slow growth means less tax revenue but spending never slows down. Some “40% of the state budget goes to government employee compensation and benefits, including payroll, state pensions, teacher pensions and current and retiree health care,” says Carol Platt Liebau, president of the Hartford-based Yankee Institute. …The Tax Foundation ranks Connecticut as one of the 10 worst states to do business. The state finished last in Gallup’s Job Creation Index in 2014 and now ties with Rhode Island for the worst job creation in the index since 2008.

What’s particularly discouraging is that Connecticut didn’t even have an income tax twenty-five years ago. But once the politicians got a new source of revenue, it’s been one tax hike after another.

Not too many years ago Connecticut was a tax refuge for New York City workers, but since it imposed an income tax in 1991 the rate has kept climbing, as it always does.

There are a couple of lessons from the disaster in Connecticut.

First and foremost, never give politicians a new source of revenue, which has very important implications for the debate in Washington, DC, about a value-added tax.

Unless, of course, you want to enable a bigger burden of government.

And for the states that don’t already have an income tax, the lesson is very clear. Under no circumstances should you allow your politicians to follow Connecticut on the path to fiscal perfidy.

Yet that’s exactly what may be happening in America’s northwest corner. As reported by the Seattle Times, there’s a plan percolating to create an income tax in the state of Washington. It’s being sold as a revenue swap.

State Treasurer Jim McIntire has a “grand bargain” in mind on tax reform and he wants to bend your ear. …the McIntire plan would institute a 5 percent personal-income tax with some exemptions, eliminate the state property tax and reduce business taxes. The plan would raise billions of dollars… The proposal also would lower the state sales tax to 5.5 percent from 6.5 percent.

But taxpayers should be very suspicious, particularly since politicians are talking about the need for more “investment,” which is a common rhetorical trick used by politicians who want to squander more money.

“It is mathematically impossible for us to sustain an adequate investment in education on a shrinking tax base,” he said.

And when you read the fine print, it turns out that the politicians (and the interest groups in the government bureaucracy) want a lot more additional money from taxpayers.

…the plan would raise $7 billion in state revenue but would lower local levies by $3 billion, for an overall increase of about $4 billion.

Advocates of the new tax would prefer to avoid any discussion of big-picture principles.

“We need to have less of an ideological conversation about this,” he said in a news conference.

And their desire to avoid a philosophical discussion is understandable. After all, the big spenders didn’t fare so well the last time voters had a chance to vote on whether the state should impose an income tax.

Voters may not welcome McIntire’s argument, either. In 2010, a proposed income tax on high earners failed by a nearly 30-point margin.

The voters in Washington were very wise back in 2010, so let’s hope they haven’t lost their skepticism about the revenue plans of politicians over the past few years.

There’s every reason to suspect, after all, that the adoption of an income tax would be just as disastrous for the Evergreen State as it was for the Nutmeg State.

To close, I want to share some great advice that was presented by the always sound Professor Richard Vedder. I was at a conference a few years ago where he was also one of the speakers. Asked to comment on whether the Lone Star State should have an income tax, he threw his hands in the air and cried out with passion that, “Texas should give the Alamo to Osama bin Laden before allowing an income tax.”

So if I’m ever asked to speak in Seattle on fiscal policy, I’m going to steal Richard’s approach and and warn that “The state of Washington should give the Space Needle to North Korea before allowing an income tax.”

I doubt I’ll capture Professor Vedder’s rhetorical flair, but there won’t be any doubt that I’ll be 100-percent serious about the dangers of a state income tax.

And what about my home state of Connecticut?

Well, I don’t know of any big landmarks that they could have traded to avoid an income tax. About the only “good” thing to say is that New York’s tax system is probably even worse.

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Two years ago, I shared a map looking at how heavily wine was taxed in different states.

What is showed was that you shouldn’t sip your Chardonnay or guzzle your Merlot in Kentucky. Unless, of course, you wanted to give politicians a lot more money to spend (or you slip across the border like Michael J. Rodrigues when buying booze).

Now the good people at the Tax Foundation have a related map. It shows which states have the highest and lowest taxes on beer.

Kentucky is still a high-tax state, but the “winner” of the beer tax contest is Tennessee.

At the risk of drawing too many conclusions, it does appear that southeastern states generally have high taxes on booze. Along with Alaska.

Maybe that’s a “Bible Belt” phenomenon. Though I’m somewhat forgiving of Tennessee for high excise taxes since the Volunteer State at least avoids the huge mistake of imposing an income tax on the wages and salaries of residents. No wonder it’s been growing faster than neighboring states.

Returning to the main topic, the Tax Foundation explains, taxes amount to a big share of the final price.

The Beer Institute points out that “taxes are the single most expensive ingredient in beer, costing more than labor and raw materials combined.” They cite an economic analysis that found “if all the taxes levied on the production, distribution, and retailing of beer are added up, they amount to more than 40% of the retail price.”

P.S. Since we’re looking at states, I can’t resist sharing bad news from one state and good news from another state.

We’ll start with some grim news from Minnesota. I’ve already commented on the insanity of using the State Department’s refugee program to subsidize terrorists.

Well, the Daily Caller reports that terrorists also have learned to bilk other programs to finance that hate of the modern world.

Two Somali-American men living in Minnesota are facing fraud charges — in addition to terrorism charges — after they allegedly used federal student loan money to purchase airline tickets to get them to Syria in order to join ISIS. …

This doesn’t quite entitle them to join the Moocher Hall of Fame, but it should outrage taxpayers anyhow.

Our good news come  from California.

J.D. Tuccille of Reason speculates that gun control has basically become impossible in the Golden State because there are simply too many guns.

California is a state where officials pride themselves on tightening the screws on gun owners. …But it’s a losing battle. Even in a political environment where villainizing guns and gun owners is a winning tactic, the ranks of the same are beyond officials’ grasp, and growing. Last year, almost one million firearms were sold in the state…it’s a good bet that California’s gun owners, and their guns, are here to stay.

Here’s a chart he including showing gun sales.

And J.D. reminds us that these are just the legal sales. As illustrated by the amusing t-shirt at the bottom of this post, there are doubtlessly lots of undocumented weapons in the state.

The bottom line is that future gun control efforts in California will probably run into the same problems that have thwarted the schemes of despicable politicians in Connecticut. Three cheers for the Americans who disobey bad law!

And since it’s Memorial Day weekend, it’s a good time to be thankful the all the folks in the military who fought to preserve our freedoms. Including the freedom to engage in civil disobedience when politicians try to trample our rights.

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In the past week, I’ve written two columns (here and here) extolling the benefits of federalism.

So I now feel compelled to warn that my support for decentralization is not motivated by some Pollyannish view of sub-national governments.

State and local government officials are perfectly capable of adopting policies that lead to the absurd waste of taxpayer money and grotesque abuse of citizens.

And they also are just as proficient at sleaze as their cousins in Washington.

Politico has a sobering report on pervasive state-level corruption. They start with a rundown of what’s been happening with the criminal class in the Empire State.

Other states have plenty of corruption, but it’s hard to beat New York when it comes to sheer volume. The criminal complaint Monday against Dean Skelos, the state Senate majority leader, and his son Adam came just three months after charges were brought against Sheldon Silver, then the Assembly Speaker. Having the top leaders in both chambers face criminal charges in the same session is an unparalleled achievement, but Skelos is now the fifth straight Senate majority leader in Albany to face them. …Senate Republicans are standing by Skelos, but if they decide to make a change, they probably won’t turn to Thomas Libous, the chamber’s Number Two leader. He faces trial this summer on charges of lying to the FBI… All told, more than two dozen members of the New York state legislature have been indicted or resigned in disgrace over the past five years.

New York seems to breed corruption, probably because it is a profligate state and there is a well-established relationship between the size of government and the opportunities for malfeasance.

But other states are doing their best to show corruption and government go hand in hand.

Silver was one of four state House Speakers to face criminal charges over the past year (Alabama, Rhode Island and South Carolina are home to the others). In Massachusetts, three Speakers prior to current incumbent Robert DeLeo all resigned and pleaded guilty to criminal charges. When Dan Walker died last week, it was hard for obituary writers not to note that he was one of four Illinois governors over the past five decades who ended up in prison. …Give any U.S. attorney a year and 10 FBI agents and he or she can probably come back from the state capital with a passel of indictments.

At some point, even non-libertarians need to recognize that 2+2=4. In other words, the evidence is overwhelming that the public sector is a breeding ground for corruption because it is premised on buying votes with other people’s money.

Which is the basic message of my First Theorem of Government.

By the way, I’m not making a partisan point. It should be obvious from the story cited above, but I’ll reiterate that Republicans are just as capable of venal behavior as their opponents.

And don’t delude yourself into thinking that “principled” Democrats are immune to sleazy behavior.

Here’s the video I narrated explaining how bloated government enables corruption.

P.S. You can enjoy some government corruption humor here, here, here, here, and (my personal creation) here.

P.P.S. If you’re a fan of Barack Obama, you may be pleased to know that we’re setting records as a result of his policies.

We already know America has experienced a record drop in labor force participation.

And we also have a new record for weakest recovery since the Great Depression.

As well as a record for declining household income.

Now we have a new record. More Americans than ever before have decided to give up U.S. citizenship. Here are some of the details from a Bloomberg report.

More Americans living outside the U.S. gave up their citizenship in the first quarter of 2015 than ever before, according to data released Thursday by the IRS. The 1,335 expatriations topped the previous record by 18 percent, according to data compiled by Bloomberg. Those Americans are driven to turn in their passports in part because of laws that have expanded bank reporting and tax compliance requirements for expatriates. The increase in early 2015 follows an annual record in 2014, when 3,415 Americans gave up their citizenship. An estimated 6 million U.S. citizens are living abroad, and the U.S. is the only country within the Organization for Economic Cooperation and Development that taxes citizens wherever they reside.

Here’s one example from the story.

“The cost of compliance with the complex tax treatment of non-resident U.S. citizens and the potential penalties I face for incorrect filings and for holding non-U.S. securities forces me to consider whether it would be more advantageous to give up my U.S. citizenship,” Stephanos Orestis, a U.S. citizen living in Oslo, wrote in a March 23 letter to the Senate Finance Committee. “The thought of doing so is highly distressing for me since I am a born and bred American with a love for my country.”

There are two lessons from this story.

  • First, it is absurd that our tax laws are so onerous (even worse than France in this regard) that some people feel compelled to give up American citizenship.
  • Second, while there are lots of ordinary Americans who are being pushed to give up their passports (folks married to foreigners, for instance), the average expatriate presumably has above-average income and is an asset to be welcomed rather than a burden to be repelled.

But such considerations don’t matter to politicians who like to demagogue about the supposed pot of gold at the end of the rainbow of overseas Americans. So we get awful laws like FATCA.

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I’ve openly stated that there are tax-hiking budget deals that theoretically would be attractive.

But notice that “theoretically” is part of that sentence.

That’s because in the real world, tax hikes have a poisonous effect on fiscal policy. Instead of being the lubricant that produces concessions from the big-government crowd, the prospect of additional revenue is like putting blood in the water when hungry sharks are circling.

The bottom line is that trying to cure deficits with taxes is like trying to cure alcoholics by giving them keys to a liquor store.

Indeed, the New York Times accidentally proved my point by putting together a chart showing that the only successful budget deal was the one that cut taxes instead of raising them.

So this is why I’m a huge fan of Americans for Tax Reform’s no-tax-hike pledge.

Simply stated, I want to restrain – and hopefully reduce – the burden of government spending. And that definitely won’t happen if politicians think more revenue is an option.

So I get excited any time voters express the same sentiment. As such, you can imagine my feeling of happiness that Michigan voters overwhelmingly rejected a big tax increase that was supported almost the entire political establishment.

Here are some of the joyous details from a Detroit Free Press report.

With all counties reporting, 1.4 million Michiganders voted no on Proposal 1 while less than 351,000 voted yes, according to the Michigan Secretary of State’s office. The 80-20 rejection may be the most one-sided loss for a proposed constitutional amendment in state history. …Proposal 1 would have hiked the state sales tax to 7% from 6%, taken the sales tax off fuel sales, and hiked fuel taxes — raising close to $1.3 billion extra for roads. When fully implemented, the plan would have also generated about $200 million a year more for schools; $116 million for transit and rail; sent $111 million more to local governments; and given a $260-million tax break to low- and moderate-income families through restoration of the Earned Income Tax Credit.

If the Michigan earned-income credit works the same way as the one in Washington, it’s not a tax break. It’s simply a wage subsidy, a form of redistribution that gets laundered through the tax code.

But that’s not terribly relevant for purposes of today’s discussion. What really matters is that politicians were pushing a big increase in the overall burden of spending financed by a big increase in the overall burden of taxation.

And they had special interests on their side, which enabled them to out-spend the pr0-taxpayer side by a margin of about 20-1.

the Safe Roads Yes committee, which pushed for a yes vote on Proposal 1, reported raising $9.6 million to spend on its campaign. Of that, $5.8 million came from the Michigan Infrastructure & Transportation Association, a lobbying group for road builders and their suppliers. …The main no committee, the Coalition Against Higher Taxes and Special Interest Deals, reported raising just under $500,000 as of Monday.

But special-interest money doesn’t necessarily translate into votes. At least it didn’t in Michigan on Tuesday.

By the way, I’m not claiming voters always make the right choices. As we saw from referenda in Oregon and California, they can sometimes be lured into voting yes on tax hikes if they’re told “the rich” are the only ones who will pay.

John Miller of Hillsdale College (site of my flat tax v. fair tax debate) explains that the politicians in Lansing were simply too greedy. Writing for the Wall Street Journal before the vote, Miller suggests voters were unhappy that they were being asked for a big tax hike, when 40 percent of the money was going to be diverted to non-transportation purposes.

…the measure would generate more than $2 billion in revenue a year. Yet the amount that would go to transportation—mostly roads and bridges, but also bike paths, light rail and “streetscape” projects that aim to improve the look of downtown areas—is only about $1.2 billion. …In other words, taxpayers will get less than $1.2 billion in roadwork for the price of more than $2 billion.

How typical. Politician proposed a tax hike for one reason, but then hijacked their own plan and made it a Christmas tree of special-interest spending.

P.S. Here are my five policy and five political reasons against higher taxes in Washington.

P.P.S. The international evidence also shows that higher taxes are a recipe for bigger government and more debt.

P.P.P.S. I don’t fixate too much on the bias of the establishment media. It’s annoying, to be sure, but it doesn’t help to get all agitated about things outside of my control. That being said, I thought it was very revealing that the home pages of both the New York Times and Washington Post didn’t have any stories on the Michigan referendum. If the vote had gone the other way, I feel 99 percent confident in stating that the story would have been prominently displayed with lots of “analysis” about why the vote was hugely important.

P.P.P.P.S. Needless to say, Republicans who refuse to take the no-tax-hike pledge should be viewed with considerable suspicion.

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