Raise Your Own Darn Taxes

In a Politico story about what appears to be push-polling (”a political campaign technique in which an individual or organization attempts to influence or alter the view of respondents under the guise of conducting a poll”) by Hillary Clinton is this gem:

Freeman Ng, a software designer in Oakland, Calif., reported getting a call late in the morning of May 5.

He wrote on DailyKos that day that he was asked how the fact that “Barack Obama failed to vote in favor of abortion rights nine times as a state senator” might affect his vote.

He said he was also asked a question that associated Edwards with tax hikes.

“A lot of the statements struck me as being very conservative and moderate in orientation, like the tax thing,” said Ng, who stands well to the left of center. “To me, that was a plus that he’s going to raise my taxes.”

Hey, you wanna pay more taxes Fine, pay more taxes. Nobody’s stopping you. But leave me out of it.

Posted on June 29, 2007  Posted to Budget & Tax Policy,Cato@Liberty,Government & Politics

Cheney’s Secret Failure

The Washington Post has been running a huge series on the power and influence of Vice President Cheney. The first two parts examined his immense influence on the administration’s response to 9/11, “pushing the envelope” of presidential power (not to mention vice-presidential power) and crafting the administration’s position on the use of torture –or rather “cruel, inhuman or degrading” methods of questioning.

But the third part, although written with the same sinister soundtrack, tells a very different story. The Post reporters seem to want us to be alarmed by Cheney’s power over fiscal policy and by his relentless push to reduce the burdens of taxes and spending on the American people. But there’s a problem with that story: not only is fiscal conservatism a good thing — unlike, say, secret authorization for domestic surveillance — but if Cheney’s goal was to constrain spending, he failed utterly.

Jo Becker and Barton Gellman report on Cheney’s power over the budget:

Cheney has changed history more than once, earning his reputation as the nation’s most powerful vice president. His impact has been on public display in the arenas of foreign policy and homeland security, and in a long-running battle to broaden presidential authority. But he has also been the unseen hand behind some of the president’s major domestic initiatives….

And it was Cheney who served as the guardian of conservative orthodoxy on budget and tax matters….

The vice president chairs a budget review board, a panel the Bush administration created to set spending priorities and serve as arbiter when Cabinet members appeal decisions by White House budget officials. The White House has portrayed the board as a device to keep Bush from wasting time on petty disagreements, but previous administrations have seldom seen Cabinet-level disputes in that light. Cheney’s leadership of the panel gives him direct and indirect power over the federal budget — and over those who must live within it….

Cheney often stepped in if he sensed the administration was softening its commitment to Republican “first principles,” Bolten said, and he was “a pretty vigorous voice for holding the line on spending and for holding the line on tax cuts.” Longtime Cheney adviser Mary Matalin said the vice president brings a “spine quotient” to internal debates.

To a fiscal conservative, this all sounds just fine: The most powerful vice president in American history, known as a strong conservative, is put in charge of fiscal policy and forces bureaucrats and Cabinet officers to “live within the budget.”

But we know the rest of the story: President Bush has increased federal spending at a faster pace than any president since Lyndon Johnson — or indeed faster. (And it is by no means all defense and homeland security spending.)

The Post reporters never quite tell us that, though there are some hints:

Cheney shared conservative trepidations about the president’s signature education initiative, the No Child Left Behind Act, which gave the federal government more control over K-12 education. He has griped privately to confidants, such as economist and CNBC host Lawrence Kudlow, about the administration’s failure to control spending. And in robust internal White House discussions, he raised concerns about the cost of the administration’s decision to expand Medicare to include a new multibillion-dollar drug entitlement, but bowed to the political reality that the president had to fulfill a campaign promise….

“Dick once told me that our president is a ‘big-government conservative,’” said former senator Phil Gramm (R-Tex.), in a recollection disputed by Cheney’s office. “Now, Dick keeps his opinions to himself whenever he disagrees with the administration, as he should. But I believe that Dick is a small-government conservative.”…

In a way, Cheney’s story is the story of the Bush administration: Where they pushed bad policies, policies that dramatically expand the power of the federal government and infringe on our liberties, they have had much success. When Cheney and occasionally Bush backed good policies, policies that would constrain government, they failed miserably. Indeed, if Vice President Cheney is indeed a “small-government conservative” who used his unprecedented power to “hold the line” for “conservative orthodoxy on budget and tax matters,” he has been a failure of Carteresque proportions.

Maybe taxpayers would be better off if Cheney had had his own staff prepare a secret federal budget and implement it without input from Bush’s staff, relevant Cabinet officers, Congress, or the courts.

Posted on June 27, 2007  Posted to Budget & Tax Policy,Cato@Liberty,General,Government & Politics

The Suburban Spending Machine

A few weeks ago I noted that the $3.3 billion county budget in one of Washington’s wealthy suburbs, Fairfax County, had a bit of fat in it, such as manners classes for kids. This weekend the Washington Post reported that ”a $2 million [swimming pool] renovation [in neighboring Arlington County], dedicated yesterday, is part of the Northern Virginia Regional Park Authority’s effort to woo residents from the increasing number of pools run by homeowners associations, officials said.”

Maybe if the private sector is providing a service, taxpayers could be relieved of that burden. If the argument is that government-run pools are intended to serve poor children who don’t have access to private pools, we could debate that policy. But the Post article makes clear that Northern Virginia government officials see themselves as competing in a “market” to attract customers from the pools provided by homeowners associations. And that seems a strikingly inappropriate mission for government.

Posted on June 18, 2007  Posted to Budget & Tax Policy,Cato@Liberty,General,Government & Politics

Bush’s Budget Chutzpah

In his weekly radio address, President Bush said that the Democrats in Congress have “passed a budget that would … pile on hundreds of billions of dollars in new government spending over the next five years.”

Can they beat the record of the past five years

Posted on June 18, 2007  Posted to Budget & Tax Policy,Cato@Liberty

The Mikulski Principle

Politicians are circling around hedge funds like vultures. They want to raise taxes on hedge funds, maybe by treating their capital gains as normal income. Why Because hedge funds are mysterious — do you know what they really do — and they have a lot of money. Make billion-dollar profits, get headlines, attract taxers — it’s as certain as ants at a picnic.

There are whole books on the correct theory of taxation. I’ve always assumed that Democratic members of Congress operate on the theory most clearly enunciated in 1990 by Sen. Barbara Mikulski (D, Md.):

Let’s go and get it from those who’ve got it.

There are many theories of taxation, such as Haig-Simons, the Tiebout model, and the Ramsay Principle. But I’d bet that the Mikulski Principle explains actual taxation best.

Posted on June 15, 2007  Posted to Budget & Tax Policy,Cato@Liberty,Government & Politics

What a County Government Does When It Has Too Much Money

The Fairfax County Taxpayers Alliance, here in the Washington suburbs, complains that property taxes have soared over the past seven years. The typical Fairfax homeowner is paying $4830 a year in property taxes. The FCTA points out that “if during the past seven years the Supervisors had held real estate tax increases to the rate of inflation, which averaged three percent per year, the typical homeowner would be paying $3,079.” Home values have been rising fast in the Washington area (at least until the past year), so taxes have also increased sharply.

Taxpayers urge the supervisors to cut taxes. The supervisors–in Fairfax County and everywhere else–respond, “Would you have us close fire stations or fire teachers or throw widows out in the snow ” Somehow they never discuss, as another item in the FCTA newsletter does, the fact that salaries and benefits have increased far more than population growth or any other measure over the past seven years. Just hold county employees’ salary increases to the rate of inflation, and you could save the taxpayers a lot of money.

Or maybe, just maybe, Fairfax County’s $3.3 billion annual budget contains some low-priority items, like this one that was the subject of a charming article in the Washington Post:

This group of 12 kids, ages 6 to 10, are in the otherwise empty cafeteria of Anthony T. Lane Elementary School in Alexandria for the last of their eight Saturday morning classes on manners, offered through the Fairfax County Park Authority.

Posted on June 6, 2007  Posted to Budget & Tax Policy,Cato@Liberty,General

We’ll Have Fun, Fun, Fun till the Taxman Takes the Good Times Away

Rising property taxes may tear down a beach amusement park that has lasted 117 years at Ocean City, Md., where thousands of Washington and Baltimore families escape the summer heat. The Washington Post reports:

For 117 summers, generations of children have frolicked through Trimper’s Rides on this beach resort town’s signature boardwalk. But this Memorial Day weekend might begin the last summer they circle the antique wooden carousel, fling around the Tilt-a-Whirl and loop through the Tidal Wave roller coaster.

The Trimpers say they are considering closing the amusement park and arcade this year.

Trimper's Rides, an Ocean City mainstay since 1890, is owned by 14 family members, some of whom are seeking help from the state to keep the park open. Linda Davidson — The Washington Post

As Ocean City has exploded into a megaresort, property taxes have soared for Trimper’s, which operates on the last chunk of undeveloped land on the town’s three-mile boardwalk. In the past three years, family members said, their assessed property value has tripled, from $21 million to $65 million.

You couldn’t blame the Trimper family if they decided to cash in on the value of their land. But it would be a shame if the family wanted to continue operating the oldest continuously owned amusement park in the United States, and rising property taxes forced them to sell. After all, their income isn’t going up nearly as much as the assessed value of the land. So an owner being taxed on the theoretical value of land that he isn’t planning to sell is then forced by the burden of taxation to sell his land after all.

The power to tax is the power to destroy charming old amusement parks.

We might note that the same phenomenon can destroy environmental amenities. A landowner who prefers to leave his land undeveloped even as development happens around or near him can find the assessed value of his land rising, and thus faces a higher tax burden, and thus feels compelled to sell the land to a developer. I have nothing against development if it’s a market phenomenon, but I don’t like the idea of conservation-minded landowners being forced by the property tax into making a decision they wouldn’t otherwise choose.

Of course, one might object that the Trimpers and the conservation-minded landowners have just as much obligation to pay for the state of Maryland’s budget as any other landowner. And you can hardly expect a big modern state like Maryland to subsist on the taxes it can assess on a three-block area valued at $21 million. So that’s part of the problem–governments today do so much that they can’t be supported with modest levels of taxation.

And then–to bring it full circle–the very people who demand bountiful government services that require burdensome taxes then bemoan the loss of cultural and environmental amenities; so they propose that government subsidize amusement parks, or buy up land and keep it undeveloped, or forbid development in designated areas. Thus requiring more government spending, more taxes, more forced sales, and the cycle continues.

So kids, when you see Trimper’s being demolished to build some more oceanfront hotels and condominiums, remember that big government did it.

Posted on May 30, 2007  Posted to Budget & Tax Policy,Cato@Liberty

Fighting for Earmarks

“Republicans will seek a House vote next week admonishing a senior Democrat who they say threatened a GOP member’s spending projects in a noisy exchange in the House chamber, Minority Leader John Boehner said Friday,” according to the AP.

Their target is Rep. John P. Murtha, D-Pa., a 35-year House veteran who chairs the appropriations subcommittee on military spending.

Murtha, 74, is known for his gruff manner and fondness for earmarks — carefully targeted spending items placed in appropriations bills to benefit a specific lawmaker or favorite constituent group.

During a series of House votes Thursday, Murtha walked to the chamber’s Republican side to confront Rep. Mike Rogers, R-Mich., a 43-year-old former FBI agent. Earlier this month, Rogers had tried unsuccessfully to strike a Murtha earmark from an intelligence spending bill. The item would restore $23 million for the National Drug Intelligence Center, a facility in Murtha’s Pennsylvania district that some Republicans say is unneeded.

According to Rogers’ account, which Murtha did not dispute, the Democrat angrily told Rogers he should never seek earmarks of his own because “you’re not going to get any, now or forever.”

“This was clearly designed to try to intimidate me,” Rogers said in an interview Friday. “He said it loud enough for other people to hear.”

Now it’s true that there’s a House rule that prohibits “lawmakers from placing conditions on earmarks or targeted tax benefits that are based on another member’s votes.” Wouldn’t want anybody to oppose your earmarks just because you opposed his.

But really — after they lost control of Congress partly because of their profligate spending and their multiplying earmarks — this is what Republicans choose to fight over They’re going to draw a line in the sand on C-SPAN to defend Mike Rogers’s right to put special-interest earmarks in appropriations bills That ought to bring the independent and libertarian and small-government voters streaming back.

Posted on May 19, 2007  Posted to Budget & Tax Policy,Cato@Liberty,General,Government & Politics

Budget Bravado

In a letter to lawmakers, the president’s budget director, Rob Portman, …accused Democrats of doing little to rein in “the unsustainable growth in entitlement spending” on Social Security, Medicaid and Medicare [reports the Washington Post].

Well, they did almost all oppose the trillion-dollar expansion of Medicare in 2003 that then-Rep. Portman voted for and that President Bush bludgeoned reluctant Republicans into supporting.

Posted on May 12, 2007  Posted to Budget & Tax Policy,Cato@Liberty,General,Government & Politics

Time for Taxpayers to Sing the Blues

Blue corn isn’t subsidized like white and yellow corn, and that’s just not right. Or so say the blue corn growers. Cindy Skrzycki’s “Regulators” column in the Washington Post today is the sort of thing that ought to make you a libertarian. So many lawyers writing so many regulations, with clauses and sub-clauses. And it’s all nonsense.

So here’s the problem:

Under the regulatory system that determines which crops qualify for inclusion in Department of Agriculture support programs, blue corn is an orphan. According to the department rulebook, it isn’t even considered corn because it’s not yellow or white, the only versions of the food that are eligible for federal agricultural loans and crop payments.

This means that farmers who grow blue corn, which is made into the blue-corn tortilla chips that many of us love to dip into a nice salsa, aren’t growing “real” corn, so they don’t qualify for loan or other support programs, according to the government.

Now you might think this is no big deal since blue corn sells for about twice what white and yellow corn do. But the growers feel hurt and victimized and, you know, invisibilized. They want to be an official government-recognized crop. And, you know, get the loans and subsidies. Like popcorn got in 2003.

But fear not. Rep. Dennis Cardoza (D-Calif.), chairman of the House subcommittee on horticulture and organic agriculture (seriously), is listening. He’s promised the blue-corn growers that he’ll try to address their needs in the current farm bill.

And then taxpayers can subsidize premium organic blue corn, lest this great nation ever run out of blue-corn tortilla chips in a national emergency.

Posted on May 8, 2007  Posted to Budget & Tax Policy,Cato@Liberty,General,Government & Politics

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