Tax Disconnect

I am amazed by conservatives (and even some liberals) who, throughout the protracted Iraq War, have advocated tax cuts. How can anyone in their right mind support spending for a foreign war without paying for it? If one approves of government expenditures for whatever reason, then it follows that they should support taxation equivalent to the expenditures. Case in point: Tax refunds are obviously money that the recipient has been able to do without. If tax rates were higher to support the cost of the Iraq War, the amount of refunds would be less. This tells me that people can afford higher taxes, while all along they are claiming the need for a tax cut. Let's get real and put our money where our mouth is.

Tax Cuts - The Panacea for What Ails Us

Tuning in to Fox News this morning, after tiring of the Headline News bimbos, I found nothing but more bimbos showing more cleavage than their HLN counterparts. Instead of talking about the latest news like HLN, the Fox News talking heads, mostly female with a couple of angry or nerdy guys, were on politics, going on and on about tax cuts. I learned that tax cuts are the solution for anything. If you want economic growth, cut taxes. If you want more jobs, cut taxes. If you want more individual freedom, cut taxes. If you want to keep more of your earnings, cut taxes. If you want the country to recover from the recession, cut taxes. If you want to prevent slackers from surviving on the public dole, cut taxes. If you want smaller and intrusive government, cut taxes. Yes, cutting taxes is the one-size-fits-all solution to what ails us as a country. It's the universal panacea to fix everything.

More money in the accounts of the wealthy and high-earning is said to spur investment which creates economic growth, but who says it won't be made in a second or third home on a Caribbean island or in a foreign security. Investment is supposed to create more jobs, but this is true only when the investment is made in the means of production, i.e., factories and manufacturing equipment, but who says it won't be made in a foreign country rather than the USA. The point is that cutting taxes and achieving the desired result would require more government, not less, to insure that the additional money would produce the desired result. So, their goes smaller, less-intrusive government.

Would someone please explain to me the correlation between the extent of my freedom and my tax rate. If freedom and the tax rate are inversely proportional, that is, those with the lowest tax rate should have more freedom than those paying at a higher rate, why is it that the latter have more life style choices than the former. The answer is simple, they have more money, more than enough money to meet the necessities of life and still enjoy a better life with more options for education, recreation, wellness, travel, entertainment, etc. Why don't the right-wingers admit that their mantra of 'tax cuts' is nothing more than a slogan designed to garner donations from those who benefit most from tax cuts, the wealthy?

Personally, I want a strong national defense; modern, well-maintained public infrastructure; quality, accessible education; affordable, preventative health care and responsive emergency services; police and fire protection; national, state and local parks, libraries, and museums; and other government services like immigration law enforcement and a criminal justice system. I don't know how a constant diet of tax cuts can satisfy my desire for beneficial role government plays in modern society. Tax cuts and the reluctance of the right-wing politicians to increase taxes to pay for wars and heightened internal security is what caused the national debt to swell during Bush's presidency. Don't hype tax cuts to me. I ain't buying.

Cutting Taxes to the Limit

In the Johnson County Sun of February 11, 2009, Steve Rose, the publisher, wrote that, since 1995, the Kansas Legislature had cut taxes to the point that they don't have enough money to pay for the government's obligations. Legislative Research estimates that $7.6 billion dollars has been given up to tax cuts since 1995. In the current fiscal year, all the rax cuts will amount to $600 million. You can read Steve's Memo for yourself.

Back on January 26th, I discussed Kansas Budget Woes. Although I mentioned how nice it would be if our revenue had been greater so we'd have a reserve for times like these, I came to the conclusion that no matter how much revenue government collects, politicians will find a wsy to spend it. Too bad they don't have the courage to raise taxes or roll-back tax cuts when the money is needed for government's day-to-day obligations.

I personally can't see the harm in an increase in the income tax during a recession. Those that have incomes from still having employment can stand for a small part of their income to be diverted to state spending. The cost of collection won't go up and it will all be spent, rather than saved. There is a real mythology about the economic effect of taxes, mostly fostered by those who want to get reelected.

Email to Congressman Dennis Moore

I was pleased to see a listing in the Sunday Kansas City Star of some of the "key elements" in the House-approved stimulus package. Frankly, I was skeptical about news media reports of GOP objections to the plan. I attributed the GOP complaints to their party line of tax cut, tax cut and more tax cuts. But, after reading the Star's partial list, I have to agree with the GOP House members who did not vote for the tomfoolery called a stimulus plan.

Too much of the plan that was adopted by the House appears to be money for pet projects, that perhaps have been neglected over the past 8 years, but won't have much immediate effect to stimulate the economy and would be better addressed through other means. For example, $6 billion for high-speed internet for rural and under-served areas. We are already paying a universal service fee on our telephone bills that should be used for this purpose without adding more debt-funded money. The reason a lot of rural areas don't have high-speed internet is that there are not enough users to make it cost-effective. Another example is $32 billion for a "smart" electric grid. Assuming the technology can be swiftly perfected, but knowing how difficult it is to get regulatory approval, acquire right-of-way for, and complete the construction of new transmission lines, this worthy goal will take too long for an immediate stimulus to the economy. Besides, a better source of revenue for this program would be electric service charges. Finally, to limit my examples to three, $20 billion to modernize health information technology systems will probably not be an immediate spur to employment, because I doubt if there are sufficient unemployed persons with skills in that area who would be put back to work.

All-in-all, the House-approved stimulus package is too grandiose and too complicated. I believe it should concentrate on tax relief, aid to the poor and unemployed and infrastructure spending for projects currently ready for bids. I can only shake my head at how such a spending spree could get through the House, but with the present Speaker, who wrongfully stuck her nose in the Turkish-Armenian dispute, it's no wonder that it passed. It's time House Democrats replaced Nancy Pelosi as speaker. A Congressional leader is needed who will focus on the real problems of this country and not use the present crisis to further pet projects of her supporters. How about some leadership in this area? As a senior house member, it's time to assert yourself for common sense measures that will provide immediate relief for the economy.

I Want A Tax Cut

Please cut my taxes. I mean, really cut 'em. Zero taxes, that's what I want. In the first place, I don't want the hassle of getting the papers together that it takes to file my tax return. I want to be able to decide how I spend every penny I am able to glom onto. I don't like to save money from month to month to pay real estate taxes every 6 months. I don't want to figure in the sales tax when trying to figure out if I can afford a major purchase. I don't like to have every little purchase bumped up by a 7-plus percent sales tax. I could drive more if part of the cost of a gallon of gas didn't include taxes. What's more, I wish my beer and liquor purchases weren't taxed, so I could by a better grade of spirits or an exotic imported beer without feeling like I was splurging. Come on, give me a break, no taxes, no how, no way.

There, in one fell swoop, I have outdone the Republican mantra of: Tax Cut, Tax Cut, Tax Cut. Never mind that government has to be paid for somehow. Public schools need money, too. Highways must be built and maintained, and so on. So, if you chant the mantra of Tax Cut, you are admitting that some taxes are necessary. But, if you are a chanter, what you're really saying is, "Let's argue about how much government we should have." You are also saying, "Let's argue about how much the economy can afford to have apportioned to taxes." And, finally, you're saying, "Let somebody else pay for government and all it does."

Well, we live in a representative republic, so we can have as much government as we want, with the caveat that the economy has absolute limits as to the amount of wealth that can be devoted to government. How do we know what that limit is? It's probably a matter of opinion, because surely if there were an empirical standard, it would have been determined by now, even if it varied by whether the economy was expanding or contracting. That thought brings us to the real question, Who pays? Of course, the other guy should pay. That's what is called personal politics. Like I said in the first paragraph, I don't want to pay taxes.

But I do pay them. We all pay them, except of course for tax evaders who under-report income, do work "off the books", engage in barter or use loopholes. I think we all should have been paying more taxes for the past umpteen years. Perhaps, the State of Kansas and other states wouldn't be facing a budget gap. Perhaps, the states would have enough cash reserves to see them through a lean tax time. Perhaps, we could have found ways to conserve our financial resources and, thus, compensate for slightly higher taxes. Perhaps, a higher Federal income tax rate would have avoided the deficits piled up from the war in Iraq or, in the alternative, the financial sacrifice would have made the war unpopular enough that our troops would have been pulled out sooner leaving the Iraqis free to settle their own problems. Taxes can actually be a good thing and we should be proud to pay whatever taxes are need to live in the greatest country on this planet.

Sarah Steelman's Puzzling Posture

The GOP candidate for governor of Missouri, Sarah Steelman, opposes the KC earnings tax. She says repeal of the 1% levy would spur economic development. Apparently, she thinks jobs are not being located in KC, because of the payroll levy and that removing it would change all that. Or, is the reason for her opposition mere pandering to KC area voters, who might see one less tax as a welcome cut in the burden of meeting the costs of government in general. One class of voters she will certainly please with this proposal is the Kansas commuters who help support the municipal needs of Kansas Citians and their visitors. The loss of around $200 million a year, 43% of the city's general fund, Steelman says could be made up from new taxes generated by growth, by eliminating wasteful spending and by stimulating downtown growth. Yeah, right! Notice that she didn't propose new taxes for state revenue sharing to replace the lost earnings taxes or offer to collect it with state income taxes and remit it to the city without charge to help with the collection costs and enforcement. By the way, she also opposes increasing the state tax on gasoline, at a time when current highway funding will not cover billions of dollars in needed repairs. Such are the contradictions of being a tax-cutting Republican.

What puzzles me is why someone would advocate a tax policy that is harmful to Missouri's major cities and leaves the highways that connect them in shambles and would still expect to proudly maintain that she's the Governor of a great state. Believe me, greatness is not the default position, rather it is the result of wise investment and viable facilities and services, all of which costs money that comes from taxes.

Pay the piper?

The Lawrence Journal-World reports: "The idea of having counties where regents universities are located increase local property taxes to help pay for $660 million in university repairs is picking up steam in the Legislature." Senate President Steve Morris, R-Hugoton, is quoted by the LJ-W: “The universities are a great economic benefit for those communities that host them. I don’t think it’s wrong to ask communities to share at least in some small way with this problem.” LJ-W also reports that Morris noted that the cities of Wichita and Topeka already assess local property taxes to help support Wichita State University and Washburn University and that House Speaker Melvin Neufeld, R-Ingalls, and House Democratic Leader Dennis McKinney, of Greensburg, said such a proposal should be considered in the other counties where regents institutions are located. Read the whole article here: Taxes touted to fund repairs.


My response: That might be an OK idea, if students from counties without a state university pay higher tuition to attend state universities or if their county of residence pays the state like they pay for county residents who attend another county's community college. And, it might be OK, if residents of counties with state prisons, state hospitals, the state capitol, highway patrol offices, KDOT facilities, state parks and lakes, state offices, and other state-owned and maintained facilities that also bring a locality economic benefits pay a local property tax for state building maintenance at the same rate as that proposed for counties with a state univeristy. After all, fair is fair. Right?

As far as Wichita and Topeka paying extra local property taxes for WSU and Washburn, let's remember that keeping the local property tax was a legislative requirement for WSU becoming state-supported. And, don't forget, Wichitans paid local property taxes at a higher rate for WSU before the state shouldered their burden and they still get special benefits from the arrangement. Washburn shouldn't even be included in the comparison, because it's not a Regents' institution and is more comparable to a community college that requires a local tax but also gets state aid.

Where in all this discussion about university building repairs is mention of the present state-wide property tax for buildings? I believe it's 1 mill, unless it's been changed. Wouldn't it be simple to increase the statewide rate to 2 or 3 mills and use it for the maintenance of state buildings wherever located? Sometimes, I just shake my head and wonder what kind of dolts the voters are sending to Topeka.

In the same LJ-W article, Sen. Marci Francisco, D-Lawrence, is reported as saying that she wouldn’t be interested in such a plan as Morris advocates because “Property taxes are too high,” and legislators also must consider that while universities provide many benefits to their home counties, they also increase costs in public services.

My response, again: The latter part of Marci's statement is true. Would Morris, Neufeld and McKinney be willing to make in lieu of tax payments to cities and counties that host state universities and other institutions to help them contend with the public service burden these institutions impose on the host communities? I doubt it. I guess when you live in Hugoton, Ingalls or Greensburg, the clean air and bucolic setting of those places give you a special perspective on the rest of Kansas. Being from a remote location must cause you to think it's all right to spend other Kansan's money for state programs from which your children derive benefits equal to the children of host communities. I'll bet if those guys were smokers, their favorite brand would be O.P.s.