A New Can Of Worms
06 May 2004
All Individuals Pay for Taxes
Business association lobbyists would have us believe that the tax payer -- like them are just another interest group. This is plainly evident from this BloomingtonPantagraph story:
"The Illinois House approved a series of property-tax relief measures for homeowners Wednesday, but opponents say schools and businesses will eat the cost...."
..."Somebody is going to have to pay more because of those exemptions," said Robert Kahman, McLean County supervisor of assessments [and apparent tax-eater], explaining the exemptions will lower the tax base, so taxing bodies will seek higher a tax rates."
Shifting the property tax burden to businesses actually makes sense. It's the corporate income tax that needs to be lessened. Businesses don't actually pay taxes, they collect them for the state. If corp. income tax is raised on widget makers, they then just add the costs onto the price of the widget.
However, income taxes are an inefficient way of collecting taxes. You pay them quarterly, you have compliance issues, you do things to avoid paying the corp. income tax, on and on and on. The property tax is based on the value of your property. You get a bill twice per year and you pay it. If you are headquartered in Madagascar but own property in Illinois, you pay your fair share.
Sure, you can complicate the process but if the tax is low enough the costs of not complying make it not worth trying to get out of. The property tax is also more stable source of revenue for the government -- property values are have a stronger immunity to wild swings in the economy -- which makes it easier for businesses to count upon too.
Finally, just about all taxes are bad. They drain resources from the economy. The moment the business tax payer is divided from the individual tax payer we all lose to the tax eaters.
03 May 2004
Previewing the Next Bush Administration
For those of you interested in the over spending in Washington, The Second Term Diet by Grover Norquist offers some insights on past successes in the first Bush Administration and offers a preview of what the second one will look like.
Tired of Washington Spending Too Much Money?
Read why a second Bush term will reign in spending.
A bit of Editing
With all that is going on, I haven't been able to either post the kinds of things I want to post nor enter quality posts I expect from myself. And my editing has been awful. I need to slow down and carefully lay out my thoughts. I also need to be more thorough in my spell checking and grammer.
Stand on labor sets Ryan apart
The Elephant in the Corner
Both the Sun-Times and the Chicago Tribune cover the Civic Federation's 68 page report on the Governor's Budget.
You can read the actual report here.
It is a disappointment. Sure, the group supports the Gov. on not hiking general income and sales taxes and takes him to task for borrowing and hiking business and fee taxes. That's great. It also calls for across the board spending reductions, which is one way to address are ongoing fiscal crisis. Although, it's not the best way to reduce spending.
What I have yet to see, however, is any real analysis of state spending. That is the elephant in the corner. The state brings in plenty of money. Florida, with six million more people gets by on $53 billion, why can't we? In the last 30 years we have almost doubled state spending in each successive decade.
By focussing on borrowing and taxing, we lose sight of the real problem. The total disregard for spending restraints. One answer to the issue would be a tax limitation and expenditure act that would hold state spending to population growth to inflation.
Another answer would be a long term program to dump low performing programs. Across the board cuts throw the baby out with the bath water. Policy wise it is smarter to eliminate a poor performing program than just trim around the edges. 2-3% staff reductions aren't going to do it. We need to get the dead wood out of state government -- that's at least bottom 10% of your work force.