Wednesday, August 15, 2007

Raise Taxes?

Our infrastructure is crumbling. The only reason any of us noticed this was due to a bridge collapsing in Minnesota. What should we, excuse me, I mean, what should our elected officials do? One of the standard answers to all that is ailing our country from the left side of the aisle is: Raise taxes! Those fool Republicans and their "tax cuts for the rich" are causing our country's roads, bridges, and power grid (remember the black out a couple of years ago?) to crumble into dust around us. It's all being held together by the cobwebs that remind us of the years of neglect.

Fortunately for us, there is Thomas Sowell. And Thomas Sowell says,
The real problem is that the political incentives are to spend the taxpayers' money on things that will enhance politicians' chances of getting re-elected.

There may be enough money available to maintain bridges and other infrastructure but that same money can have a bigger political pay-off if spent building something new instead of maintaining and repairing existing structures.

When money is spent building a new community center, a golf course, or anything that will be newsworthy, there will be ribbon-cutting ceremonies and the politicians who cut the ribbons can expect to see their pictures in the newspapers and on TV.

All that keeps their name before the public in a positive role and therefore enhances their prospects of being re-elected.

But there are no ribbon-cutting ceremonies when bridges are being repaired or pot-holes are being filled in. These latter activities may be more valuable than a community center or a golf course, but they are not nearly as photogenic.

The preference for showy projects that will enhance a politician's career prospects is not peculiar to current politicians. Adam Smith pointed out the same thing about politicians in 18th-century Europe.

We can vote the rascals out but the new rascals who replace them will face the same incentives and in all likelihood will respond in the same way.

A pattern that has persisted for more than two centuries is likely to continue unless something fundamental is changed.
Sowell also says,
Those who live by talking points now have a great one: "How can we fight an expensive war and repair our neglected infrastructure without raising taxes?"

Plausible as this might sound, tax rates are not tax revenues. The two things have moved in opposite directions too many times, over too many years, for us to take these clever talking points at face value.

This administration is not the first one in which a reduction in tax rates has been followed by an increase in tax revenues. The same thing happened during the Reagan administration, the Kennedy administration and the Coolidge administration.

Tax rates and tax revenues have moved in opposite directions many times, not only at the federal level, but also at state and local levels, as well as in foreign countries.

How many times does it have to happen before people stop equating tax rates with tax revenues? Do the tax-and-spend politicians and their media supporters not know any better — or are they counting on the rest of us not knowing any better?
Besides, we know how readily and how easily our government wastes our tax dollars. From the Citizens Against Government Waste website, we have this choice tidbit,
Members of the Senate Transportation/Treasury Appropriations subcommittee paved the way for another year of reckless spending by adding 874 pork projects totaling $1.28 billion in the fiscal 2006 Senate Transportation, Treasury, Judiciary, and Housing and Urban Development Appropriations Act. Not satisfied with grabbing money for parochial projects, the appropriators also included $5 billion for 18 programs that the president suggested eliminating or reducing. Programs resurrected from the scrap pile of presidential cuts include $150 million for the Revitalization of Severely Distressed Public Housing account (the HOPE VI Program), $25 million for the National Defense Tank Vessel Construction Program, and $24 million for the Department of Housing and Urban Development’s Office of Rural Housing and Economic Development.
That of course is only the beginning, and it's only one bill. They've been doing this for years . . . with our money.

Of course, there's more. There's always more. We taxpayers provide our elected representatives a bottomless well in which to dip from. According to John Stossel,
By now you've probably heard that a new Government Accountability Office (GAO) report states:

From 1999 through 2005, the USDA "paid $1.1 billion in farm payments in the names of 172,801 deceased individuals. ... 40 percent went to those who had been dead for three or more years, and 19 percent to those dead for seven or more years." One dead farmer got more than $400,000 during those years.
But wait, it gets better,
An amendment that would have withheld subsidies from farmers with incomes of $250,000 or more was rejected by the House.
Hmm, maybe I didn't mean better. I'm sure there's another word for what I really meant, but I try to watch my language.

CONCLUSION: Congress already has the money. If they thought more about working for the country rather than pandering in order to get reelected, this wouldn't be an issue. If Progressives who hate Capitalism would take the time to learn a bit about real world economics, there wouldn't even be this stupid debate.

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At 10:30 PM, Blogger jennifer said...

Can't get this through the MSM can we?? Great post, and I sure do love Thomas Sowell!!

Harry I am having some tech problems on penofjen(yes I have it backed up- but can't figure out some of the techie things) so until I get it fixed visit me at my new temporary home

At 10:39 PM, Blogger jennifer said...

Harry penofjen is back!!

At 8:04 AM, Blogger Harry said...

I wondered why your site came up blank last night. But I'm glad you're back.

At 9:20 AM, Blogger Rancher said...

Exactly right, new things like a bridge to nowhere are sexy, there are no ribbon cutting ceremonies for bridge maintenance.

At 6:36 PM, Blogger Harry said...

speaking of welcome back . . .


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