by Scot Mussi | Aug 23, 2011 | News and Updates, Uncategorized
The Arizona Republic ran a front page article highlighting the surge in lottery ticket sales. According to the article, in FY2011, the state sold $584 million worth of tickets – the most ever.
In this downtrodden economy, one might surmise that the spike in sales is due to the spike in financial desperation. It’s unfortunate, since lotteries are among the highest-taxed activities in the country. It’s also a hidden tax. It’s also a regressive tax, since it hits lower income people disproportionally harder. If the poor want to gamble, that’s fine with me, but the state shouldn’t be sponsoring, advertising, enticing, and acting as the culprit in the activity.
The tax on a lottery ticket is about 24%. Where is that advertised?
But even worse than hiding the tax is the aggressiveness of state government to get people to play (and pay). The advertising budget for the state lottery is $15 million.
Lottery Executive Director Jeff Hatch-Miller:
“Even though there was a recession and times were tough, that meant for us that the state needed that money even more.” (The heck with the people who might have needed it.)
“When times are tough, people need a good rate of return if they’re going to play the game. It’s better (for the state) that they play the game – even though (the state) gets a slightly smaller percentage – than they don’t play it at all.”
From the Republic article:
But state officials say the Arizona government needs the revenue it gets from Lottery sales even more in an era of budget cuts. They point to the changes made to make the games more enticing to players, such as improving odds of winning, selling new kinds of games and improving displays. (My emphasis.)
The changes were especially important in the face of a weak economy that has consumers cutting their spending. (My emphasis.)
“We knew we would have to act to counteract the recession, especially in Arizona,” Executive Director Jeff Hatch-Miller said. “We knew we had to really get out there and start listening more clearly to the players.”
So Hatch-Miller used the power of the state to “counteract” a declining interest in gambling during a recession. Is this really the role of state government?
by Scot Mussi | Aug 12, 2011 | News and Updates, Uncategorized
Let’s hope this isn’t an indication of where things are headed in the next legislative session, or even moderately reflects Gov. Brewer’s position.
As reported in the Arizona Capitol Times:
Arizona Commerce Authority CEO Don Cardon (no relation to Wil) offered freshman Congressman Ben Quayle some gems of advice this week. As reported by my colleague, Caitlin Coakley, Quayle held a roundtable with business owners who expressed deep dissatisfaction with partisan rancor.
Cardon advised that politicians need to drop some of their hard line approaches against all things government. One example offered by Cardon, who is Gov. Jan Brewer’s go-to man when it comes to job creation, would be the objection by many to having the government “picking winners and losers” when it comes to determining which businesses and industries should or shouldn’t get tax breaks or other nifty incentives.
That said, it’s hard to believe that Cardon, who is leading the state agency that was given a $25 million “deal-closing” fund, wishes the ACA could buy a reprieve from the state Constitution’s gift clause — or at least get the Goldwater Institute to look the other way. Cardon also encouraged Quayle to double-down and adopt sure-fire stances certain to make a fiscal-conservative voter base cringe.
“The market already picks winners and losers,” Cardon told the congressman, adding that government is well suited to decide which industries could use government investment to help spring back to life. “That’s where you say, maybe I cast a vote that will end my political career in two to three years,” he said.
by Scot Mussi | Jul 22, 2011 | News and Updates, Uncategorized
Bill Gates’ straight talk on solar subsidies was refreshing and spot on. Courtesy of the Wall Street Journal and from an interview in Wired magazine.
[Chris] Anderson: When you look at the big picture [for the future of energy], where should we be focusing besides nuclear? On massive solar plants in the desert? On middle-size stuff for office roofs? Or is there a reinvention that could be done right in the home?
Gates: If you’re going for cuteness, the stuff in the home is the place to go. It’s really kind of cool to have solar panels on your roof. But if you’re really interested in the energy problem, it’s those big things in the desert. . . .
I think people deeply underestimate what a huge problem this day-night issue is if you’re trying to design an energy system involving solar technology that’s more than just a hobby. You know, the sun shines during the day, and people turn their air conditioners on during the day, so you can catch some of that peaking load, particularly if you get enough subsidies. It’s cute, you know, it’s nice. But the economics are so, so far from making sense. And yet that’s where subsidies are going now. We’re putting 90 percent of the subsidies in deployment—this is true in Europe and the United States—not in R&D. And so unfortunately you get technologies that, no matter how much of them you buy, there’s no path to being economical. You need fundamental breakthroughs, which come more out of basic research. . . .
Anderson: So suffice to say we will find no solar cells on the roof of the Gates residence?
Gates: Oh, we like to be cute like everyone. For rich people, this is OK. Rich people can do whatever they want.
by Scot Mussi | Jul 7, 2011 | News and Updates, Uncategorized
Narrowly targeted tax incentives like those for ethanol producers are really just spending items, the expenses of which could just as easily appear on the spending side of the federal budget ledger. This is why the elimination of these credits should not require an offsetting tax cut somewhere else as some Republicans appear to demand. After all, conservatives who support cutting federal spending haven’t demanded that each dollar cut be used to reduce taxes. No one has articulated why we should treat spending on ethanol, solar, or any other tax incentive differently just because that spending happens in the tax code rather than in an appropriations bill.
by Scot Mussi | Jul 5, 2011 | News and Updates, Uncategorized
At the state level, the Arizona Free Enterprise Club led the charge against targeted tax incentives for movie-makers. No longer do Arizona taxpayers have to pay movie makers to make movies. The federal government should follow this lead.
Call them by any variety of names: tax incentives, tax subsidies, tax expenditures, tax credits, etc.; unless they are used to break up a government-run monopoly (i.e. public education), conservatives should be united in abolishing these behavior modifiers. That goes for ethanol, solar, oil, film, whatever. You want to debate the merits of research and development tax credits? Fine. But if the country really wants to unleash the power of a true free market economic system, it needs to abolish the current tax code and all of the market distortions that go along with them. These tax favors are really spending line items anyway. If ethanol producers can’t make it in the real world, why should the rest of the tax-paying public give them cash? Why does the fed pay people to have more kids through the per child tax credit? These policies hurt economic growth. On this topic, there should be no debate among conservatives.
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