Sick and Tired

March 1, 2010

- See all 164 of my articles

What I am sick and tired of is the budget and tax debates that we have to go through every year. It doesn’t matter whether we are talking city, state or national politics. Whenever there is not enough money in the budget to cover every program, the only proposed cuts are in essential services (i.e. police, fire, military). The only solution is raising tax rates, not cutting other services or programs. What else is in the budget? Are all of the other line items in the city charter or in the state or federal constitution?

As an example, my state established a special levy tax to cover a shortfall in the roads budget. Okay, a specific tax for a specific purpose. This year, our governor wants to divert some of the money brought in by this special levy to pay for the state patrol. This was an interesting bait and switch. What in the over all budget is more important than funding the state patrol? I have actually requested a copy of the proposed budget, and I was informed that it would not be available until it was passed into law. A bit late I think!

I am not a member of the Tea Party, so I am not asking for tax cuts. I am not a libertarian, so I am not asking for the elimination of taxes either. There are legitimate reasons to have taxes and to raise those taxes. I am fiscally conservative. Just like in my own finances, if the money is not there, do not spend it. If I cannot afford something, I can not go to my boss and tell him I need a higher salary. Actually, I can, but I do not have the authority to force him to give it to me. If on the other hand, I offer to perform some additional service or make additional product, he will probably compensate me for that additional effort. So it should be with taxes.

We have basic taxes to fund necessary government functions. Any other activities that are desired by the community should come with a funding source so that the boss (tax payers) can decide if that activity is worth funding. Whether that is new taxes or some fee schedule would have to be decided at the time of implementation of the program. This is not an evaluation of the value of any specific program. There are things that have to be funded, but many of the activities that are in different public budgets are designed to “encourage” or “develop”. Although these programs may be good to have for the community, they are by definition non-essential. If the people want the program, they will accept a tax hike or fee. If that funding is insufficient, then the true costs will be exposed and the value of the program can be reviewed.

I really don’t have a problem with attaching each program, even the basic stuff, to specific taxes. If 2% is good enough to cover the fire department of a community of 1,000 people, the efficiencies of scale should make it good enough for a community of 100,000. This example is of course completely arbitrary, I have no idea what an actual tax rate against what commodity (land, property, income, sales) is necessary to fund a fire department. This may result in the reduction of activities supporting local parks or loss of the subsidy for sheep in South Dakota for wool army uniforms (not used since WWI), but it will make tax and budget discussions less divisive. All I am really asking for is transparency and an elimination of the scare tactics used to get tax hikes

4 Comments (+add yours?)

  1. Evan
    Mar 01, 2010 @ 09:00:28

    The biggest problem, at least where I live, is that the vast majority of the budget is employee costs (healthcare, pensions, salary, etc.). Most other areas of the budget would barely put a dent in keeping costs down, unfortunately.
    .-= Evan´s last blog ..3 Creative Uses of Dropbox =-.


  2. Squeaky
    Mar 02, 2010 @ 15:14:22

    Hey Martin, watch for my article on Thursday. You SAY you’re not a Libertarian but you may be surprised. I seem to have very similar opinions that you have and I have a little Libertarian in me. That SHOCKED me, but it’s true.

    BTW, we’re seeing these same issues in Colorado. The governor just signed a bill that imposes a tax on food, candy, soda and (an irritant of mine)…internet sales tax. AAAAAAAAAAARRRRRRRRRRGGGGGGGGHHHHHHHHHHHH. They need more money so they’re hitting the tax payers even though the economy is down. NOT the right time for new taxes…common sense tells us that.


  3. Martin Kelly
    Mar 02, 2010 @ 19:10:05

    Evan, if we reduced some of the programs that we can not afford, those employee costs would drop. Now I am not advocating a wholesale cut of government employees, but a slow down in hiring and cutting the jobs that are “non-essencial” just like any business that is short of income should be benificial to all levels of government.

    Squeaky, sad to hear that Colorado is going down that path. Here in Iowa, the tax increases are harder to get passed. Good old fashion farmer conservatism. The attitude of a lot of legilators is pretty sad; times are good so increase spending, times are bad so increase taxes.


  4. kosmo
    Mar 03, 2010 @ 10:13:53

    Of course, it’s not as if Iowa’s income tax rates are particularly low to begun with. I pay considerably more state income tax in Iowa than I did when I lived in Illinois – because the rates are much higher. The top rate in Iowa is 9%, compared to a flat 3% in Illinois.

    Iowa taxes internet sales, but only those sales to residents of Iowa. Luckily for me, “Items delivered to the purchaser electronically or digitally are exempt from tax.” This is nice, because it means that I don’t have the hassle of dealing with sales tax at the Store 🙂


Leave a Reply