In another sign that voters are becoming tougher critics on proposals to raise taxes, voters in Colorado overwhelmingly rejected an income and sales tax increase designed to direct additional money to public education.
The proposal would have raised the state’s flat tax about 8 percent (from 4.63% to 5%). The sales and use tax increase would have moved from 2.9 percent to 3 percent.
The measure lost 64% – 36%. Democrats in Washington, DC should take notice.
Can’t someone on the “This Week” roundtable bring this up?
Stan, I’m afraid you’re heading down a blind alley. You cannot hold pre-NYT Economist Paul Krugman up to the current version. You’ll just go mad. Sallie James pointed out the problem with Columnist Paul Krugman, when it comes to the concept of competitveness.
But my favorite example was well chronicled by our friend James Taranto last year. When Sen. Jim Bunning held up an extension of unemployment benefits, Krugman lamented “the incredible gap that has opened up between the parties”
Take the question of helping the unemployed in the middle of a deep slump. What Democrats believe is what textbook economics says: that when the economy is deeply depressed, extending unemployment benefits not only helps those in need, it also reduces unemployment. …
But that’s not how Republicans see it. Here’s what Senator Jon Kyl of Arizona, the second-ranking Republican in the Senate, had to say when defending Mr. Bunning’s position (although not joining his blockade): unemployment relief “doesn’t create new jobs. In fact, if anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work.”
Krugman added, “To me, that’s a bizarre point of view — but then, I don’t live in Mr. Kyl’s universe. And the difference between the two universes isn’t just intellectual, it’s also moral.”
Intrigued, Taranto went out to investigate what “textbook economics” says on the matter. He went to, of all places, Paul Krugman’s textbook (co-written with Robin Wells, AKA Mrs. Krugman) Macroeconomics. It says:
Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. . . . In other countries, particularly in Europe, benefits are more generous and last longer. The drawback to this generosity is that it reduces a worker’s incentive to quickly find a new job. Generous unemployment benefits in some European countries are widely believed to be one of the main causes of “Eurosclerosis,” the persistent high unemployment that affects a number of European countries.
Now Krugman’s extended moralizing about helping the unemployed is not invalidated by his hypocrisy, but his pose of astonishment that anyone could agree with what his own textbook says is hard to square with claims of consistency or good faith.
Once in a while, seemingly when I need it most, I can’t remember the list of President Obama’s “big ticket” policy enactments. Thankfully, Michael Boskin listed them in a column in the Wall Street Journal on September 8, 2011:
Boskin points out that the stimulus bill cost $280,000 per job – by the administration’s estimates of jobs “created or saved,” and much more using more realistic estimates.
Results:
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?
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.
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