Raise taxes to pay for regulation? What do we get for our money?


Letters to a blog of the Orange County Register (California):

In praise of regulations

ORANGE, Susan Wong: I recently went through my day being mindful of what taxes do for me. I took a shower in clean water. I drove to work over safe, well-maintained streets. I was free to practice a profession of my choosing. I am able to do this work because I got my degree at a California state school and passed the California Board exam to earn my license.

On the way home, I stopped at an FDIC bank to take out some money that I had earned and am allowed to keep to support myself and my family. I stopped at a grocery store and bought safe food to eat due to various government regulations. I took my dog for a walk at a beautiful regional park. I picked up a takeout dinner at a restaurant inspected by state inspectors. And I went to sleep in peace.

Government exists to provide us with tangible things that an individual cannot provide for himself. I am so tired of people complaining about taxes as if they get nothing in return. It takes money to run a government that allows us to live our lives as we do.

So, let’s be grown-up about it and raise taxes to keep California from becoming a third-world country.   (May 25, 2011)

Evidence that not every Californian is crazy.

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17 Responses to Raise taxes to pay for regulation? What do we get for our money?

  1. Rob Ryan says:

    Well, I was specifically talking about California, as was the original poster. We can discuss the US tax system ad nauseum but that’s a wholly different topic.

    Left to me, one of the many things I’d do on the “revenue” side would be a large (on the order of $1/gallon) tax on gasoline. Lest it be thought that that’s because I don’t drive, between my wife and I we put approximately 85,000 miles/year on two vehicles. Some of this is for earning a living, some for reasons having to do with our personal circumstances. Thus, it would cost me and my family somewhere north of $4K/year but would price the externality of our driving and be taxing a thing that, as a society, I believe we need to see less of. This is as opposed to an income tax, which taxes production – something we’d presumably not want to see less of. As I say, a completely different discussion from where we started, i.e., in California.

    With respect to higher minimum wages, shorter work weeks, more vacation, higher government entitlement spending, etc., how is that working out in Greece, Spain, Portugal, France, etc.?

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  2. Nick K says:

    This says it better then I could:

    The writer is correct about the tax through interest expenses that is the result of borrowing, but incorrect about the effect of tax cuts. In fact, it is tax cuts that have caused so much borrowing without helping the economy. Here is what is wrong about the idea that tax cuts create jobs:

    1.Businesses hire the employees they need to hire to meet demand. If demand is low no amount of tax cuts can induce a business to hire people. Why hire and pay people to have them just sit around?
    2.The way to get more customers into the businesses – i.e. to create demand – is to get more money circulating in the pockets of regular people. Cutting taxes for the already well-to-do doesn’t accomplish this. The way to do this is with government policies that increase wages and reduce working hours, like how raising the minimum wage and mandating 40-hour weeks and weekends off helped create America’s middle class. Helping regular people is good for business.
    3.The writer says we should do what has worked in the past. The fact is that the economy has always done better when the tax rates on the wealthy and corporations were highest. Just look it up. The reason for this is that our economic system when left to itself always becomes a low-age, everything-to-the-top system, because the wealthiest always game the system to get the most for themselves. The way to fix that is to apply regulations to prevent this, and high taxes at the top so the government can implement policies that raise the wages of the rest of the public. This is how we got out of the depression after the huge concentration of wealth that built up until 1929.
    4.Taxes are not an “expense.” Businesses pay taxes on the profits (revenue minus expenses) — so the businesses that need help don’t need tax cuts, they need customers. It doesn’t make sense to try to help businesses that are not doing well by giving even more money to their profitable competitors. We should be using that money to instead help the businesses that need the help. Helping the already well-to-do is bad for business.

    http://www.speakoutca.org/weblog/2009/12/tax-cuts-and-de.html

    Because, Rob, your little idea would take money out of the middle class which therefor will have less money to spend and therefor less money in the economy. If there is less money in the hands of the middle class that means there is less demand for a company’s goods or services which will force the companies to cut their workers and the cycle goes on and on. Your idea..would make California’s budget situation worse.

    Quit buying into stupid scapegoats.

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  3. Nick K says:

    Nor do I see a reason to bust the unions just because you want to pretend they’re a problem. So if you want something then you’re going to sacrifice more then a little to get it.

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  4. Nick K says:

    Gee, the tax cuts to the rich and the businesses that the right wing said would lead to such economic prosperity for everyone, create millions of new jobs and balance the budget while fixing the deficit.

    Oh and I work in a bank. Last time I checked, workers aren’t allowed to form unions in banks.

    But tell you want…you want something done about public union pensions and the like? Then what are you going to give up for it?

    Are you willing to give up the tax cuts? You willing to raise taxes? Willing to put a cap on executive pay and demand that those businesses put that money instead into creating jobs?

    Because I see no reason to punish the middle class on your asinine say so.

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  5. Rob Ryan says:

    Just exactly which tax cuts were those Nick? Are your dues paid up?

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  6. Nick K says:

    And lets not forget the cost to the economy and to..well the families of those public workers when you sit there and cut their salaries and pensions because you want to engage in a “Lets be stupid and bust the unions across the chops” game.

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  7. Nick K says:

    Rob writes:
    There’s little question that the unfunded liabilities for public employee unions is a huge budget problem. It’s also pretty clear that the political class here is beholden to such as the SEIU.

    Yeah..how about the stupid dumbass tax cuts that a certain part of the “political class” there enacted in their beholdedness to the rich, the powerful and the businesses.

    It’s real easy to sit there and blame public workers, most of whom bust their asses every day, so you can sit there and turn a blind eye to a much larger part of the proverbial equation.

    And then even better..you’d make california’s budget situation far worse with your little turn back idea.

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  8. Rob Ryan says:

    There’s little question that the unfunded liabilities for public employee unions is a huge budget problem. It’s also pretty clear that the political class here is beholden to such as the SEIU. I don’t think that even they would disagree, though they wouldn’t view it the same way that I do.

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  9. Nick K says:

    Oh please tell me you’re not one of those “Lets be stupid and scapegoat the unions…”

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  10. Rob Ryan says:

    Yes, I acknowledge that Proposition 13 was not enacted with an eye toward reducing the State of CA budget. It was actually enacted, at a time of very high inflation, for the purpose of homeowners not being sacrificial lambs for increasing budgets at all levels.

    But that’s not the point. If you live here, the rumblings are that “everything would be OK if we could just get out from under the brutal restrictions of Prop. 13.” In fact, if the State would turn 1/2 of the difference between the amount budgeted in 1978 vs. 2010 adjusted for inflation back to local governments, they’d then have $454 per capita in 1970 dollars vs. the $371 in 1978 and be able to turn over about $18B to local governments.

    And do I feel that the State is doing more for its residents (other than public employee unions) than it was in 1978? I think most would agree that the answer is the opposite.

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  11. Ed Darrell says:

    Rob, Prop 13 killed increases in local property taxes. It killed county funds.

    Increases in the state budget demonstrate a desperate — and as we see, ultimately unsuccessful — attempt to undo the damage of Prop 13 to roads, schools, libraries, fire departments and police departments.

    What happened to the county budgets cut by Prop 13? State budgets don’t show that.

    You might as well show a chart of the federal budget, or the budget of the state of Iowa, as to show the state budget of California and claim Prop 13 didn’t do damage. Prop 13 didn’t target state taxes for the most part. Read the thing: Prop 13 killed local, county property taxes.

    Consequently, a chart of the state budget does not include the changes wrought by Prop 13.

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  12. Rob Ryan says:

    No, comments are always open for all my posts. Prop. 13 was targeted at property taxes. Regardless of Prop. 13, the State’s budget has increased during most years on a per capita, constant dollar basis. The charts do not show Prop. 13 specifically, they show the minimal effect, if any, that its passage had on the spending of the State of CA. It’s true that the State managed to keep increasing its budget in part by siphoning local funds. But what value has the increased per capita constant dollar spending brought to the State’s citizens?

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  13. Ed Darrell says:

    Did you stop allowing comments on that post, Mr. Ryan? Why?

    I think you’ve made a significant error. At least, I hope you have — if it’s intentional, it’s dishonest.

    Prop 13 didn’t freeze all taxes and spending in California. It was targeted at schools and education, and under California’s funding, police and fire departments, and libraries. It essentially froze property taxes at a 1975 level, and prohibited increases to keep up with inflation, with a limitation to a 1% total value of a home going to property taxes.

    [Article 13 (Proposition 13)] SECTION 1. (a) The maximum amount of any ad valorem tax on real property shall not exceed One percent (1%) of the full cash value of such property. The one percent (1%) tax to be collected by the counties and apportioned according to law to the districts within the counties.

    As a consequence, police departments, fire departments, libraries and schools all saw decreasing budgets. California public schools had been ranked in the top 5 in almost all achievement categories up to the passage of Prop 13 — now California schools often rank near the bottom of the 50 states.

    I don’t doubt that it costs more to run a state with lousy schools, decreasing funding for cops and firemen, and a rotting library system.

    The irony is, then, that by limiting property taxes, Prop 13 also locked in increasing taxes overall.

    Killing the schools to spite the liberals, and instead ended up raising taxes on everybody. Prop 13 is truly one of the stupidest ideas to come down the pike of taxation in a long, long time (surpassed, perhaps, only by the TRIM Amendment in Prince Georges County, Maryland, passed a short time later, and repealed in 1984 to save the county from complete collapse).

    As an indication of the failure of Prop 13, one need only look at the increase in costs of prisons in California. Peoples who spend more on education tend to have much lower prison populations because educated people commit fewer crimes, less violent crimes, and need to be locked up less. California’s ruined schools can’t fill that function so well anymore. So, California spends an enormous amount of money on many, overcrowded prisons, that are effectively schools for crime.

    So your charts tell only part of the story, the part where Prop 13 failed to stop rising taxes. Where the whole truth is shown, Prop 13 is revealed to be a bad idea.

    Plus, you assume that all property taxes prior to 1978 were collected by the state, and would show in the state budget. That’s probably inaccurate. I think your chart shows state taxing and spending, not the local taxing and spending that Prop 13 limited. I’m not sure your charts apply to Prop 13 at all.

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  14. Rob Ryan says:

    Sure, sure, the evil Californians and there refusal to tolerate reasonable taxes. This myth is deconstructed at this post. The inflation adjusted per captita CA budget is 45% higher currently than the year before Prop. 13 was passed. I’m not suggesting eliminating taxes but the wailing and gnashing of teeth over the stinginess of CA taxpayers is cynical and hypocritical.

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  15. Nick K says:

    You mean as opposed to the far more narcisstic personality that describes 99% of the right in which their operating philosophy is “I got mine, **** you”, Era?

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  16. [...] Well, glad to see this is still making the rounds. Nicely captures the Obama-narcissistic-personality “You Should Be [...]

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  17. blueollie says:

    The problem is that it takes a 2/3 super majority to raise taxes (in the California state legislature).

    Like

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