Back in 2005, Staples scored a marketing coup with a humorous series of "easy button" television commercials that advertised the chain as the simplest way to restock office supplies. Unfortunately, government officials have applied that "easy" concept to their budget planning.
Every time they face a shortfall, they hit the tax button -- or convince clueless voters to hit it for them. Politicians deem every government program as being vital (to their re-election) and become a unified, bipartisan "party of no" when anyone suggests that they act like normal people and cut their budgets rather than tax more so they can spend more.
When economic times are good, the tax-and-spenders say it's the best time to raise taxes because voters can afford it. When times are bad, like now, they say they have to raise taxes because revenues are declining as property values tank, people lose jobs and consumers spend less.
Here's just a sampling of states that are rushing to push the tax button this year:
- Illinois legislators may try to sugarcoat a 50 percent jump in the state income tax with ethics reforms spurred by the removal of Gov. Rod Blagojevich earlier this year. Gov. Pat Quinn's budget also calls for a $1-a-pack hike in the cigarette tax and huge spikes in the fees to register and drive vehicles.
- A two-thirds majority of the Nevada Legislature, the same margin required to override an expected veto by Gov. Jim Gibbons, cleared a $781 billion tax hike that will cover sales, payroll, vehicle- and business-license taxes.
- Massachusetts is on the verge of raising its sales tax by 1.25 percent to generate more than $600 million in revenue. The state plans to spend the money on "vital" services like regional tourist councils, housing and mortgage subsidies, and summer jobs for at-risk youth.
- And Oregon lawmakers drafted a tax plan designed to raise $277 million on the backs of corporations in the state to partially address an $800 million budget shortfall. The lawmakers also hope to boost the gas tax by 6 cents and take a bigger cut of some people's incomes.
City officials are fond of the tax button, too. Pittsburgh Mayor Luke Ravenstahl proposed tax hikes on commuters and nonprofits as a "golden opportunity ... to really fix our finances for the foreseeable future." His plan would nearly triple the tax on people who work in Pittsburgh, and hospitals, universities and other organizations would lose their payroll tax exemption.
Congress won't be far behind, with the federal government facing a $1.8 trillion deficit this year and the Obama administration pushing health care and energy plans that would force lawmakers to impose new taxes to fund the initiatives.
It's enough to make taxpayers scream. Even liberals like Whoopi Goldberg are sick of government officials at all levels whose first budgetary impulse is to tax their way out of a mess.
California voters recently channeled Goldberg in a "Back off me!" vote against a series of ballot initiatives replete with taxes in order to address a budget deficit of more than $20 billion. They clearly don't want more taxes, and right-thinking officials like state Assemblyman Chuck DeVore, who resigned his Republican leadership post in February when party leaders embraced a massive tax hike, know there are better ways to balance a budget than pushing the tax button.
For starters, California could cut $2.5 billion to $3.5 billion a year from its budget by tightening welfare law. The state pays three times per capita the national average for welfare, DeVore said, and significant savings could be achieved by denying benefits to illegal immigrants, implementing eligibility checks to reduce fraud and actually enforcing the federal welfare-to-work requirements that the state has ignored for years.
Prison costs also are out of control. DeVore said California pays $44,000 a year per prisoner, compared with $22,000 for Florida, and privatizing parts of the system could save big bucks. He added that the Golden State could generate non-tax revenue by allowing companies to use slant drilling to tap oil reserves within three miles of the California coastline.
DeVore's ideas prove that in California and elsewhere, there are ways to cut government spending and even boost revenue without taking more money from taxpayers.
Minnesota Gov. Tim Pawlenty also proved last week that there are ways to disarm the tax button. He saved his state from $2.7 billion in spending and the new taxes to pay for it by outmaneuvering lawmakers determined to tax and spend their way into a California-like hole.
Florida is another case study. Citizens helped then-state House Speaker Marco Rubio draft 100 ideas (PDF) to better the state. Only a few focused on taxes and spending, but the point is that ideas exist. If government officials aren't creative enough to balance budgets on their own without tax hikes, they should solicit input from taxpayers, who have a bottom-line incentive to help.
There is no easy way out of a fiscal crisis, and governments need to realize that hitting the tax button repeatedly is not the answer. All it does it create new headaches for the future.
K. Daniel Glover's Bio
K. Daniel Glover has worked as an editor, writer and new media specialist in the Washington area since 1991, spending most of that time at National Journal and Congressional Quarterly. Glover is currently a project manager at Accuracy In Media and last year served as the executive producer of the conservative video-sharing site Eyeblast.tv. He blogs at The Enlightened Redneck .
Posted
06-03-2009 8:49 AM
Link to this post: