Oh Ken, say it ain't so

Ken Cheuvront has decided to vote to extend a tax cut in a year when we have record deficits. The article from the KVOA is here. Ken seems like a good guy. It has been long known that he is a fairly pro-business/libertarian Democrat. I personally do not have a problem with lower taxes, but I do have a problem with a Democrat voting to extend a tax cut when we are underfunding education and have massive budget shortfalls. If you plan on extending tax cuts then you should not vote for them unless you have a means to pay for them. It also bothers me that his business is a likely beneficiary of the cut.

I would like to have an explanation as to why he chose to do this. I am willing to give him the benefit of the doubt for now...

The tax returns are here

I am not sure why the Clintons thought that releasing their tax returns this late in the season was a good idea. Here is the link:

We will have stories for at least the next week about their massive $109 million in income since 2000. I think this could be what finishes her off, but then you never know...

Dumb people should not be allowed to make tax plans

Why is it that only dumb and short-sighted people seem to float initiatives about taxes? The East Valley Tribune has this article about eliminating the income tax in Arizona. The myopia that pervades the right-wing anti-tax crowd is staggering.

I get it guys, you don't like taxes. I don't like taxes either. I also do not like going to the dentist or painting my house when the paint is peeling or fixing my roof when it is leaking. I would like all of those things to magically fix themselves for free.

Government has to do things. It needs to provide law enforcement, roads, parks, sewage, water, schools, courts etc. All of these things cost money. The government needs sufficient and stable funding to operate. I for one do not trust right-wing ideologues to determine whether a sales tax will provide enough funding to do what needs to be done.

The unintended consequences of these sorts of policies can be pretty harsh. I am being self-interested here (I pay property taxes, income taxes, car taxes, sales taxes etc). Anyone who has lived in a state without an income tax have seen how the state insures its funding. In California they passed Prop 13 for property taxes, now they have a very uneven system of property taxation. If you are a new home owner, you get stuck with much higher property taxes (and all manner of fees) to make up for the others with low taxes. It is similar to rent control. You also pay higher prices for car tags and almost everything else. In Florida, property taxes are sky-high because they don't have Prop 13 or income taxes. In fact, there are fees everywhere when you deal with the government.

What I almost never see is an analysis of the consequences of something like prop 13. What is the affect on the housing market when a new house pays double the taxes as the house next door? Does it affect the fungibility of property? Does it keep newer home owners out of the market? Does it drive higher foreclosure rates? Will a sales tax only system provide sufficient revenue? Will people seek loopholes out of self-interest with property and sales taxes?

The first problem that I think of with a sales tax only system besides its regressive nature for food and other necessities, are online sales. If you increase sales taxes you will incentivize buying online to avoid taxes. For instance when I bought my wife's engagement ring, I purchased it online. Not only were the prices lower and the quality better, but I got a 6% discount because of no sales tax being charged. If you significantly raise sales tax the incentive to buy online goes up significantly.

My only point here is that when it comes to taxes, I wish that the right could have an adult conversation about providing necessary services and the unintended consequences of changes. You anti-tax folks must realize that just because something sounds good does not mean that it is good.

The stupidest law in Arizona strikes again

The East Valley Tribune clearly has an anti-tax slant and displays it here. Here is a quote:

Despite increased state funding for education in recent years, school districts remain dependent on having budget overrides — and asking voters to pay for the costly habit.

They make it sound like the schools have a $300 a day drug habit. Perhaps the reason that overrides are needed is because of this:

Expenditures per Student: The U.S. average per student expenditure for public elementary and secondary schools in 2003–04 fall enrollment was $8,248. States with the highest per student expenditures: New York ($12,325), Connecticut ($11,774), New Jersey ($11,390), Massachusetts ($10,772), and Vermont ($10,763). Utah ($5,091), Arizona ($5,347), Oklahoma ($5,976), Arkansas ($6,005), and Mississippi ($6,137) had the lowest per student expenditures (H-11). (From NEA 05 Educational Rankings report)

Could it be that they need extra funding because we are in the bottom four in spending. I am sorry, but anytime Alabama beats you it is time to rethink your strategy.

Welcome to Grover Norquist’s wet dream

Sure this article about Mexican tax reform from the Arizona Republic is an interesting topic, but I just kept thinking about how much our anti-tax people would prefer the Mexican system. Corporations pay almost no taxes. Individuals pay almost no taxes. There are large cartels owned by a small group of people that control much of the country’s capital.

It is interesting that this point is not made more often, but the market utopia put forth by the anti-tax crowd is decidedly third world. It is the de facto system for most third world nations. The thing to remember is their market utopia is not really ‘market’ oriented, so much as a power grab for their friends. They don’t want lots of competition… When their friends, supporters and cronies are winning they say it is competition, but when they cannot compete they want help from the government through no bid contracts or government give aways.

They want to gather power, not create a more competitive economy. They want to suck on the public teat when it suits them and then rail against the use of public money when it decreases their power or advantage in other areas. They do not care about our country. They do not want to ready our society for the realities of global economics. They don’t want to see us stronger. They have only one purpose, increasing their own power, everyone else be damned.

Fair Tax My A$$...

Some of you may have read that many people are attributing Mike Huckabee's surprise second place finish in the Iowa Straw Poll to the so-called fair tax movement. At the time, I made a mental note to look into the changes they are proposing. I just happened to run across this article in the Wall Street Journal. Boy, is it a bad idea according to BRUCE BARTLETT, the former Assistant Secretary of the Treasury.

Whatever your philosophical beliefs about consumption based tax structures, this one is pretty disingenuous. It reminds me of most of the recent proposals for Social Security, Clear Skies and healthy forests. The problem for the right-wing is that they would never be able to pass these proposals honestly, so they resort to back door tactics. They cannot say we oppose Social Security and Medicare because of philosophical reasons. They pretend to protect them while plotting to fatally wound them. I know politics is not nice, but I have a real problem with their tactics. This tax proposal strikes me as more of the same.

They remind me of petulant teenagers with no sense of propriety or purpose.

UPDATE:
Here is a link with a response to the article sited above...
http://www.libertypost.org/cgi-bin/readart.cgi?ArtNum=198361

I did not find the response terribly persuasive, but I posted it in the interest of fairness.

Mesa is Like a Parasite

Special thanks to Arizona Congress Watch for pointing this out in the East Valley Tribune. I find it particularly amusing that tax experimentation and Grover Norquist play ground, Mesa Arizona is making up for its goofy, shortsighted and unrealistic governing strategy by getting money from the Feds. Do you think they will move the date for Tax Freedom Day up a few weeks for Mesa this year?

I feel sorry for Mesa because I know there is a large group of voters who live there that are not crazy, but unfortunately this is what one party rule brings...

Earmarks: Saint McCain and Flake need to wakeup

I have some respect for Jeff Flake and his crusade against earmarks and government waste. First and foremost, I believe in fiscal prudence by the government. I think we should be required to have a balanced budget every year. The problem I have with Flake and McCain's stand is that their constituents pay taxes to the Federal Government and it the job of every Congressman and Senator to bring some of that money home in the form of reasonable projects (I think we all know reasonable when we see it).

There is a big difference between a bridge to no where and securing additional transportation funding for a growing state like Arizona. The East Valley Tribune has this article. The money quote is from our good friend Harry Mitchell:

Historically, Arizona has not received a fair share of federal funding on several fronts, including money for highway and wastewater infrastructure, Mitchell said. In some instances, some federal funding formulas are based on U.S. Census Bureau counts that are decades old and don’t reflect Arizona’s population growth. As a result, Arizonans pay more into federal tax accounts than they receive in benefits.“Think about this: Arizona has been a donor state,” said Mitchell, whose 5th Congressional District includes Tempe, Scottsdale, Ahwatukee Foothills, Fountain Hills and part of Mesa.“In terms of highway funds, we get 92 cents back on every dollar,” he continued. “That’s not right. Now, you can call it an earmark or not. But I think the very fact that there are projects that are going to be funded, the money is there, that the residents of Arizona have as much right to get some of their tax dollars back as residents of any other state.”

Be Afraid, Be Very Afraid...

The local (probably helped by National) anti-tax groups in Arizona have filed this initiative to limit property taxes. So, what is the problem? After all, nobody likes paying property taxes. There are a couple of problems: 1. It did not help California keep property taxes under control. Instead of costs being evenly distributed, they are now heaped on new home owners. When my wife sold her house in California she was paying $1100 a quarter. I am not kidding... Her taxes were outrageous. The fact is that newly developed areas are limited in their property taxing authority, so they add other assessments and fees to make up for it. The net result is that when you buy a new house you get lots of fees that older home owners avoid. It is like rent control, great if your rent is controlled, but really sucky if it is not. 2. The California educational system was severely hurt by their property tax changes. 3. This is why we have elections. Why should someone tell me or my community the level of services that can be provided. Our system is already self-regulating. If taxes get out of control, we can defeat the people responsible and roll back assessments. Some municipalities want more services than others. They will have higher taxes than other communities.

Also, Arizona has really low property taxes. I have relatives in Florida that were amazed and jealous when I told them what I pay in property taxes. Furthermore, if you read the article above, we already have several laws or constitutional amendments dealing with this issue. The fact is that this a solution seeking a problem, not the other way around.

I wish I knew what was being done to defeat this... What a bad idea.