Our Taxing Future

This short item on Ohio Gov. Bob Taft's proposed tax on satellite dishes can stand in for the unending stream of such plans that are currently being hatched at the state level all across the US of A.

As the states grapple with massive budget deficits, they'll be taxing everything they can and, as the exemption of cable boxes in Taft's plan underscores, doling out favors to special-interest groups at the same time.

It may be time to clone Grover Norquist, the anti-tax advocate referenced in the story.

Comments

[IRS Jim]

The whole tax system is coming apart under the wieght of the tax cutting obsession. With a federal goverment which is hell-bent on spending as much as possible while simultaneously giving out tax breaks, the state and local governments are burdened with more obligations but less access to the tax base...

It is no wonder that we end up with this sort of absurdity. It is like watching children squabble about doing chores.

It is time we all grew up: taxes are required to pay for our necessary public services.

[geophile]

Has anyone heard of Rep. John Linder's FairTax?

From the summary: "To promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States. "

Linder's Site: http://linder.house.gov/

FairTax Summary:

http://thomas.loc.gov/cgi-bin/bdquery/z?d108:h.r.00025:

[Madog]

I don't mind paying for services, it's the definition of "necessary" that causes problems in this instance.

I don't mind paying for education. However, I do object to things like tax funded stadiums and civic centers, among others. I'd like to see less spent on the military and social services, and more on the space program. So it irks me to have to pay taxes since the money goes to things I don't support.

[JD Weiner]

Geophile: Hmm, maybe we can add Linder to the short list of Congressmen who deserve something other than a rope and a lamppost on First Street? (Incidentally, I see that all new public access to the Capitol has been suspended, "to provide the highest level of public safety". Too many people out there with the rope idea, I guess.) I'm all in favor of ditching the income tax, but I'm not sure a sales tax would be the way to go. Take a look at the April 2003 issue of Liberty for a CPA's perspective on why a national sales tax might not be much better than what we've got now - although I have to say that anything that lets me not fill out that hated 1040 is attractive.

[dude]

Ah, good old Tax Hike Taft. As an ohioan, I don't know what we did to deserve such a lousy line of submediocre politicians. Ohio is verging on a one-party system, and its republicans are especially slow-witted and disappointing, I guess for lack of competition. (What democrats there are tend to be inept party hacks mainly inflicted on the cities).

[Mark S.]

"It is time we all grew up: taxes are required to pay for our necessary public services"

Sorry IRS Jim, frankly I can't think of one "public service" that justifies the government robbing me (They didn't ask me if I wanted their services, ergo it's robbery.) to pay for. I didn't realize accepting government thuggery and theft to be "grown up."

[Rick Barton]

In response to the post of "IRS Jim":

"The whole tax system is coming apart under the wieght of the tax cutting obsession. With a federal goverment which is hell-bent on spending as much as possible while simultaneously giving out tax breaks, the state and local governments are burdened with more obligations but less access to the tax base..."

With the exception of the correct observation concerning federal spending the preceding simply gets it wrong. Most state governments are in trouble because their response to a declining economy has been to raise taxes instead of to cut spending. Raising taxes is harmful to economic activity and not only lowers general properity but
also further exacerbates the governments revenue problems in these "hard times situations" by winding up bringing in less, instead of more tax revenue. At least in part, the current economic problems are due to the tax rate cuts being to modest. Note also, that states with lower taxes and better control of state spending have far better economies. Colorado is a notable example with its "Taxpayer Bill of Rights" constitutional amendment which limits both taxes and spending Also it has a more fiscally restrained legislature and governor. (Owens won an award for limiting taxes and spending from "Club for Growth" or some such organization.)

"It is no wonder that we end up with this sort of absurdity. It is like watching children squabble about doing chores."

The only things child-like here are the pronouncements by "IRS Jim"

"It is time we all grew up: taxes are required to pay for our necessary public services"

But the answer is that the number of these "necessary services" that must be provided by government is small enough so that there are other ways besides taxes to pay for them. If "IRS Jim" really does work for the IRS abolishing his job would be a represent progress toward creating more honest job opportunities in the nation.

[Brian]

"Necessary public services"

--A drug war that neither stops people from using drugs nor makes non-users safer

--Bombing the shit out of countries that may or may not be a real threat to us

--Rebuilding the countries we bomb the shit out of

--Millions of dollars in appropriations to various halls of fame, museums, and other pet pork barrel projects

--Administering the ridiculously complex tax system that is supposedly necessary to support all of the above

And that's just what I came up with without stopping to think about it...

[Steve]

I'm not sure sure the state has legal standing to tax satellite users. We don't get taxed on our radios, or on broadcast television. The satellite companies don't "do business" in a particular state anyway, do they? And the airwaves are subject to FCC as interstate commerce.

But what do I know? I'm just a freakin' engineer. somebody fill me in on the legality of this?

Regards,

Steve

[Croesus]

Wasn't it Plato who wrote that the downfall of a Republic is presaged by the discovery by the people that they can vote themselves income?

[Blarney]

Alright, people, it's time for me to explain the difference between a public good and a private good, and why the government should fund one and not the other. This is liberalism in a nutshell, folks, listen and learn.

A private good is one which benefits a limited set of people who can exclude others from enjoying these benefits. A candy bar is a private good, because if I eat it you can't eat it too. The government has no business funding private goods - they should not tax the many to feed the few.

A public good is one which benefits a set of people who cannot exclude others from enjoying the benefits. People can come in and get a free ride on the public good. Scientific research published in a journal of record is a public good, because I can use the ideas and so can you. As nobody gets exclusive access to the results, the lack of profit motive causes a suboptimal amount of this good to be produced. Therefore, it is quite reasonable for the government to pay for some of it.

Examples. The government SHOULD spend money researching diseases that do or could potentially infect it's population. The government SHOULD NOT spend money to create a secret recipe for a tastier hamburger - McDonalds can and should fund that.

The government should NOT build cars. The goverment SHOULD build roads. The government should not build modems. The government should regulate the telephone lines and see that they are kept in working order and people have access to them across the country. The government should not buy guns to give to people for self-protection. The government should, however, maintain a professional and effective police force.

The government should not fund authors to create copyrighted novels or artworks. The government should, however, make sure that its citizens know how to read.

And so on. Public goods belong in the public sphere. Private goods can be paid for out of our own pockets, and will be produced for a profit motive, but public goods will not be produced for profit alone.

[JD Weiner]

Blarney: I take it you mean Teddy Kennedy-style liberal, not classical liberal... Problem is, virtually nothing is a purely public or purely private good. Take learning to read. Sure, it benefits everyone indirectly, but it benefits the individual who learns to read a whole lot more. A road benefits mainly the people who needed to travel that route, and everyone else a whole lot less. Giving me the secret tastier hamburger recipe can benefit everyone if I sell them tastier hamburgers.

Once you look at things this way, it appears as less black and white and more shades of gray, and who's to say where the dividing line is? Everyone can benefit from handy household tips, so the government should be Heloise. Everyone can enjoy and be enlightened by works of art in the public domain, ergo the government should produce books, movies, TV shows, etc. Everyone would benefit from a more enlightened populace, so the government should have mandatory political education sessions.

A classical liberal economic objection is suggested by one of the phrases you used: "the lack of profit motive causes a suboptimal amount of this good to be produced." Well, define "suboptimal". How do we know what's a suboptimal amount? What mechanism do we have for communicating scarcity or abundance on a large and distributed scale? Prices, mainly. But you have removed a number of goods from the free market, thereby eliminating the signals which prices give us. Now how do we know what's scarce and what's abundant? How do we know whether we should be educating the people more or less, or building more roads or fewer? I suppose that, coming from your position, you've started with the axiomatic assumption that the market is not a good indicator of scarcity or abundance. But if that isn't, what is? What makes your definition of "suboptimal amount of X" any different from "the Grand Poobah says there is not enough X"?

[Xmas]

I'm still concerned that whenever state or federal governments say "budget crunch" they actually mean "we expected 1 billion dollars more in taxes this year than last but we actually only got 250 million more."

Government budgets seem to be all guesswork and prestidigitation. I actually applaud Bush for trying to cut off the blood supply to the metastasizing Federal Government. It's about time the government started making "tough" decisions again.

[Susan]

I think it is a shame and disgusting the way our government is treating the poor and disabled..., they give grants to the rich, give themselves nice fat paychecks while collecting PAC contributions, they live in nice homes, while cutting the benifits of the poor and disabled. The federal government pretends they are doing us right and many are falling for their lies, until they find themselves in the same condition as the disabled and poor... can anybody help? If the poor ask for help from HUD they are told to get their help from a church, if the disabled need help fixing up a mobile home, they are told no programs are available for them, only for those who live in block or frame houses, and then they are told to move into a rental unit somewhere and give up their home... It is a digusting shame what is really going on in America today...!

[Rice Sonja]

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[StoweBerns Lindsey]

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[Combs Charles]

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[Reed Melissa]

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[Rice Sonja]

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