First Amendment Returns to Arizona
This morning, the US Supreme Court struck down Arizona’s “matching funds” provision in the Clean Elections law by a 5-4 decision.
You can read the opinion here.
The case is Arizona Free Enterprise Club’s Freedom Club PAC v. Bennett.
Conservative senators lined up with Coburn
Americans for Tax Reform wanted to sum up the debate about ethanol subsidies as a tax increase vs. the status quo. If you voted for Sen. Tom Coburn’s (R-OK) amendment to end the $5 billion a year subsidy for ethanol producers, you support higher taxes. Coburn’s amendment failed, but did garner support of 34 of 44 Republicans (as well as 6 Democrats). A breakdown of those Republicans shows that the most conservative, free market Republicans voted with Coburn.
Cornyn (TX)
DeMint (SC)
Heller (NV)
Inhofe (OK)
Kyl (AZ)
Lee (UT)
McCain (AZ)
McConnell (KY)
Paul (KY)
Rubio (FL)
Sessions (AL)
Toomey (PA)
Coburn’s right on ethanol subsidies
The lingering feud between Sen. Tom Coburn (R-OK) and Grover Norquist, head of Americans for Tax Reform, was punctuated last night when Coburn’s amendment to end ethanol subsidies failed to garner the necessary 60 votes in the Senate. Coburn says he won because 34 of 44 Republicans voted to end the subsidies. Norquist says he won because his amendment didn’t pass. Technically, Norquist is right, since for now the policy isn’t changing and ethanol producers can continue receiving $5 billion a year in government subsidies. But Coburn is right on the policy and the fact that 77% of his GOP colleagues voted to end the ethanol subsidies is a good sign for policy (and politically) minded Republicans.
It’s not that Norquist is a fan of ethanol, but he’s been insistent that if tax credits for ethanol are repealed, there must be a corresponding tax cut somewhere else, preferably across-the-board. Otherwise, he says, it’s simply a tax increase on ethanol producers, plain and simple, and tax hikes, no matter how they are defined, are bad public policy. Since Coburn’s amendment didn’t take the money that would have been raised by ending the ethanol subsidies and redirect it to across-the-board tax cuts, Norquist opposed the plan. Coburn simply wanted to use the ethanol subsidies to pay down the deficit.
Norquist’s opposition is unfortunate both in policy and politics. On the policy level, there should be very few, if any, tax expenditures (credits, subsidies) in the tax code. If government wants to subsidize something, it should do so through a line item in a spending bill. Had this been the case, then Coburn’s amendment simply would have been to strip funding for ethanol producers and Norquist would have happily agreed.
At a political level, there are few better places to begin demonstrating to voters the GOP’s commitment to cutting the budget than ending tax subsidies for ethanol. Unless you live in Iowa, Coburn’s amendment is probably supported by 70% of the electorate.
Norquist did support an amendment authored by Sen. Jim DeMint (R-SC) that would have ended the ethanol subsidy and the death tax (thereby making the complete package a net revenue reduction). That amendment didn’t go anywhere. And DeMint, often referred to as the Senate’s tea party leader, voted for the Coburn amendment anyway.
Democrats, taxes and the unemployed
I don’t mind spirited debates over whether varying kinds of tax cuts have an effect on economic growth, job growth, or any other kind of growth. It is a factual statement that high taxes impede growth while low taxes do not (would you work if the tax rate was 100 percent?).
State Republican lawmakers are reluctant to increase the length of time the unemployed are eligible for benefits. Democrats and Gov. Brewer want to increase unemployment insurance from 79 weeks to 99 weeks. Some Republicans, therefore, have decided that in order to garner their vote in favor of 20 more weeks of unemployment insurance, there must be some kind of corresponding tax reduction. Tax cuts (the right kind – not these), Republicans argue, will help the overall economy.
In today’s Arizona Republic story on unemployment insurance, however, the article closed with:
Democrats questioned how another tax break would translate into an immediate job for many of the long-term unemployed.
But nearly two years of unemployment insurance does? I’m still waiting for one Democrat to go on the record saying that 20 more weeks of unemployment insurance reduces Arizona’s unemployment rate.
Will AZ Republicans enact the Democrat Agenda
Democrats in Arizona only hold nine seats of thirty in the Senate and 20 of 60 in the House. But if recent reports are to be believed, the GOP-dominated legislature is about to pass a package perhaps unanimously supported by the left.
A special session of the legislature is called for tomorrow (Friday); the crux of the call is to add an additional 20 weeks of unemployment insurance benefits for those who have been out of work. Current benefits run 79 weeks. Brewer and the Democrats have been clamoring to make it 99 weeks. (Two years is 108 weeks.) The pitch to recalcitrant Republicans, like Maj. Whip Steve Pierce, is that it won’t cost the state a dime. But it will cost the federal government many dimes and since Arizona taxpayers are also shouldering the burden of the national debt – currently about $130,000 per taxpayer – it doesn’t make sense to most Republicans (and Independents I’m betting) to spend another dime moving benefits from a year-and-a-half to almost two years.
I’m sympathetic with those who have worked tirelessly in search of a job. The economic toll on many families has been harsh. But if they are really unable to find a job after 79 weeks, what makes 99 the magic number? It’s like the minimum wage argument. At what point is it “too much”?
But more troubling are reports that House leaders want to broker a deal with the governor: 20 additional weeks of unemployment insurance for SB1041 (the bill that subsidizes new businesses at the expense of current businesses). During the regular session, the House and Senate regrettably passed this measure overwhelmingly. The Democrats voted unanimously for these subsidies (evil corporate subsidies?) and only a handful of conservatives opposed them. Thankfully, Gov. Brewer vetoed the bill and said it was unfair, with “the potential to favor new businesses over those who’ve weathered the economic storms with us.”
That’s exactly right. You don’t revive the Arizona economy by increasing taxes on those entities who have weathered the economic storm with you only to provide those extra taxes to the new kids on the block.
The legislature took the first responsible step for getting Arizona’s economy back on track. It produced a sensible budget that relied less on borrowing and gimmicks than years past. This will help long term because as Arizona creeps out of this recession, our state expenses will be more in line with revenues. The legislature also deserves credit for reducing taxes that really are an obstacle to growth: corporate income and commercial property. Granted, these reductions will not happen overnight, but overnight fixes do not exist. If they did, we’d certainly know about them and we (and other states) would have implemented them by now.
Recoveries hurt. They take time to recover from. There are no quick fixes. The last thing state lawmakers should do, however, is enact the Democrat agenda.
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