Eliminate the Corporate Tax

We received another disappointing jobs report Friday, which now continues an annual pattern of ‘jobs report’ disappointments in the beginning of Spring.  Some will blame the sequester, some will blame the tax increases, and some still will find a way to blame George Bush.  It is obvious, however, that four years into our “recovery” a different idea than government spending is needed to create jobs, and get the kind of growth in our economy that we used to get after recessions.  This is why the best jobs program would be to eliminate the tax on romney corpCorporations, and move to a simpler system where all taxes are paid at the individual income level.  This idea solves two problems with our tax code: a perception of fairness; and slow jobs & economic growth. 

Thanks to Warren Buffet and Democrats, there is a complete misunderstanding of why the individual capital gains and dividend rates are lower than those for regular earned income.  Those who understand that these earnings have already been taxed at the corporate level, and involve risk taking, have chosen not to explain it.  The President has used the fact that these rates are lower as a battering ram to mislead people into believing the system is set up against them and unfair.  Stories such as ‘Mitt Romney not paying as high a percentage as someone who works’, helped steer this perception.

The United States has the highest corporate tax rate in the industrialized world at 35%.  Politicians have talked of corporate tax reform that would bring this rate down to 25%, while eliminating loopholes.  Even with this idea many countries will still be below ours, such as Ireland whose rate is 12%.  Going to zero would end the competition, since other countries could only match us.  There do need to be safeguards put in place so that C-Corporations are not individuals masquerading as a company (perhaps a 50 person minimum for a C-Corp).  The other types of companies (LLC’s, Sole Proprietor, Partnerships, and S-Corps) are already taxed as personal income.  The revenue loss would be made up by taxing dividends and capital gains at the individual earned income rates.  In other words, rather than having a different (lower) tax on these types of income, the rate would be the same regardless of how your income was earned.  Imagine the flood of companies that will want to relocate to the United States to get the zero rate, and the jobs that will accompany these moves.

When you hear people from all sides of the political spectrum playing the blame game for continued anemic growth and jobs creation, listen if anyone has a solution.  You will hear ideas from the administration with words like investment, infrastructure, education, etc.  Just remember that we have never had a recovery lead by government spending.  Since 1978 there was an understanding among the parties in Washington D.C. that a lower Capital Gains rate spurs investment, which helps the economy.  The current crop of Democrats led by the President would rather engage in class warfare than solve problems.  The idea of eliminating the corporate tax will spur growth, create jobs, and make sure that Warren Buffet the same percentage as his wealthy secretary.

Where is the Press on the Cost of Obamacare

The House Republicans recently came out with a budget that repeals Obamacare.  There have been numerous interviews with budget committee chairman Paul Ryan (R-WI) about the budget he has presented.  All of the reporting seems to be focused on the political angles, or the practicality of the proposal.  Asking about who this will help politically or how this would ever happen while the President is in office must be more interesting.  Ryan has stated that the elimination of Obamacare, and the tax increases that were to pay for it, will save over $700 billion in the next ten years.  How can that be true, since the President promised that his healthcare law would not add a dime to the deficit?dime

No one has challenged Mr. Ryan’s conclusions.  They have simply questioned the prudence of the document politically.  The media loves the politics of this issue so much, that they have completely overlooked a big story.  In his September 9, 2009 address to a joint session of Congress, the President said the following…

“And here’s what you need to know. First, I will not sign a plan that adds one dime to our deficits — either now or in the future. (Applause.) I will not sign it if it adds one dime to the deficit, now or in the future, period. And to prove that I’m serious, there will be a provision in this plan that requires us to come forward with more spending cuts if the savings we promised don’t materialize.” (Applause.) http://www.huffingtonpost.com/2009/09/09/obama-health-care-speech_n_281265.html

The costs are obviously higher than estimated.  Where are the calls from the media for the President to come up with additional spending cuts as promised?  This, in a nutshell, is what is wrong with our press.  They should be questioning either the numbers that Mr. Ryan is presenting, or the President’s promise that Obamacare will not add “one thin dime” to the deficit.  The law was passed only three years ago, and it hasn’t even been implemented yet.  If it does not add one dime to the deficit, then how can repealing it save $700 billion?

The press is certainly biased, and that may be the case here.  If someone were to show that the Republican budget and the President’s promise don’t jive, it may lead to some tough questions for the President.  It’s much more fun to talk about the next election, or ask some more poll questions.  Even a biased media that paid attention to facts, or had a memory beyond last weekend, would have challenged Ryan’s numbers in order to keep the President’s promise intact.  This issue seems to point out more of a laziness in the media than bias.  Keeping score of how one side is doing over the other, just leaves all those hoping for solutions as the losers.

 

What Cypress Portends for America

Cyprus is a small island country in the Mediterranean.  Their government did something last week that should be a wakeup call to all citizens of debtor nations.  In order to continue to receive support in the form of loans from the European Union, they agreed to tax 10% of all bank deposits.  They later withdrew this idea after public outcry, and it is not clear what their ultimate solution will be.  The reason it is important is that it shows what governments will do when they are desperate.  When the U.S. debt crisis comes, and there are no more buyers of our bonds, our government will take a similar step.

There are many particulars to the problem in Cyprus that are not the same as the United States’ debt problems.  The problem there was caused by the banking system making bad bets on Greek debt.  These differences are important, but it really doesn’t matter how a debt crisis begins they all lead to similar decisioATMns.  What is instrumental is that when confronted with a crisis, the first reaction was not to slash costs, cut employee benefits, or lay people off.  There are no calls to cut retirement programs, or shrink the government.  The reaction was to go get money from those who have it.

Those media outlets that chose to cover this story were quick to put analysts on the air to remark about how FDIC insurance and personal property rights in the Constitution would not allow this type of step to happen here.  FDIC deposit insurance is only a protection in the event that your bank becomes insolvent or declares bankruptcy.  There is nothing in our Constitution that prevents the implementation of an Asset tax.  The Congress can pass a law that grabs a certain % of all deposits in lieu of a later tax return (think withholding).  When the United States cannot sell bonds in order to borrow more than it spends every year, the budget will need to be balanced immediately.  The total assets of the United States amount to roughly $188 Trillion, is it so inconceivable that a future government faced with this situation will just tax assets 1% every year, thus solving their problem? (http://rutledgecapital.com/2009/05/24/total-assets-of-the-us-economy-188-trillion-134xgdp/)

How this look into the future relates to the current budget standstill is an interesting exercise.  Republicans are very concerned about the country’s current and mounting debt.  The recent budget put out by the Republican Party gets the budget to balance within ten years.  They also address the future drivers of our debt, namely the entitlement programs of Medicaid and Medicare.  Democrats are not all that concerned about the debt, and have put out a budget that proves this.  They are not that concerned about getting the budget to balance, nor do they choose to address any of the unsustainable entitlement spending.  In a recent interview with ABC news, the President said, “My goal is not to chase a balanced budget just for the sake of balance.”  Is it just a coincidence that the party which does not want to raise taxes makes hard decisions to bring the budget into balance, while the party that seems to relish raising taxes doesn’t think that balancing the books is all that important?

We have been given a look into how government leaders react to a debt crisis with the events in Cyprus.  They go after who has the money for immediate relief.  Why will our politicians be any different in a debt crisis?  When you need to balance the budget immediately, taxing assets will be sold as the only solution.  This is why Democrats don’t really care if the debt keeps going up, or if we ever solve the long term unfunded liabilities.  They look at America as one giant piggy bank, and when the crisis hits they will be all too happy to act as a hammer to crack it open.

An Unbalanced President

President Obama has probably repeated the phrase “balanced approach” when talking about budget and deficit solutions, over 100 times at this point.  If you just listen to him saying that phrase over and over, you probably think that he is interested in raising some taxes, as well as cutting spending to solve our country’s debt problem.  Perhaps he should play the tape back to himself, so that he can be convinced that the country needs a balanced approach to the problem that we find ourselves in.  Fresh off getting a deal with Republicans around New Year’s that was exclusively tax increases, you would think that in order to obtain “balance”, spending cuts would be front and center.  Instead this unbalanced President seems to have a case of amnesia, or worse, when it comes to the tax increase deal.  He wants to act as if it never happened, and start with a “new balance”.  The good news is Republicans can remember three months back.thumbnailCAD94FRU

When you want people to come your way in a negotiation, you try your best to be reasonable before the negotiations begin.  Talk in generalities, and say things like “I know we can make a deal”.  You don’t want to impugn the motives of you adversaries, because it will be that much harder to make a deal.  This is vital in a public negotiation in order for all parties to claim victory, and not get resentful of the person they must strike a deal with.  Then if discussions break down, you can claim that you were looking for a deal, and were reasonable all throughout the process.  This approach allows you to claim credit for being honorable, and if you disparage your opponents, others will understand.

This President takes the exact opposite approach to what should be done.  First, he makes his position public.  This leaves little room for compromise without someone looking like they’ve lost.  He then publicly attempts to bully his opponents into changing their stance.  If that doesn’t work he goes out on the campaign trail to try to get the public to push his agenda.  After this scorched earth policy doesn’t work, he resigns himself to trying to appear reasonable.  This is completely unbelievable to his negotiating partners after they have been raked over the coals.  Either he is the worst negotiator to ever sit in the White House, or he is unstable.

This past week there was the reconciliation phase of this reverse negotiation.  The news was lit up with Presidential meetings and dinners with Republicans.  Did any of those Republicans ask the President during dinner why he accused them of not caring about: children’s daycare; women’s mammograms; or seniors’ healthcare?  Did they mention that they didn’t appreciate being blamed for the sequester (spending cuts), which was his idea?  Did they ask why he demonizes their point of view that less government helps those in need?  Probably not.  They also probably weren’t forced into another tax increase just because the received a nice dinner.

If we combined the agreements over the fiscal cliff and the sequester, there would be no doubt that a balanced accord was reached.  Somehow separating these two events by a mere 60 days has created a lack of balance in the President’s mind.  Mr. Obama is not only dishonest, he is a dishonest broker.

NYC Nanny

This is not the latest Lifetime TV reality show, but the state of affairs in the nation’s largest city.  The past few years New York City has taken some pretty big “Nanny State” steps.  They have eliminated smoking indoors and at outdoor stadiums, stopped the use of Trans fat, reduced salt in cooking, and most recently crNannyacked down on the dreaded “Big Gulp”.  In all of the reporting about these steps, you would think there would be more analysis as to why.  There are those who think this is just the natural progression of the liberal mindset, and NYC is certainly controlled by liberals, but there is a bigger issue at play here.  The overriding reason for all of this intervention in the free lives of New Yorkers is that near 40% of the population of NYC is on Medicaid.  The decisions in regards to health, by the people of New York, have a tremendous financial impact on the city.  How long before more city and state governments come to this conclusion?   

Medicaid was a program developed for the poor, but do-gooder lawmakers with an entitlement mentality have increased the coverage from the truly needy to as many as possible.  The funding for Medicaid is shared by the City, the State, and the Federal government.  The State of NY has capped its contribution, and the feds are an unreliable future source of money, so the funding going forward will increasingly fall on the City.  (http://www.nypost.com/p/news/local/city_medicaid_near_critical_condition_gXDExUBXUJRS2hAZiXZ2EJ).  Faced with these facts what would a forward thinking executive do?  Try to Big Gulpreduce costs. 

As more and more people are enrolled on Medicaid, there develops a parent-child relationship between the government and the people.  These citizens have no incentive to keep themselves healthy, because they do not pay for the consequences of their bad decisions.  Mayor Bloomberg has decided that he will reduce the cost to NYC by eliminating unhealthy choices for all New Yorkers.  His steps, even with all of the collateral damage, are reasonable when viewed in this light. 

One of the major provisions of Obamacare is to cover more Americans through a further expansion of Medicaid.  This allows people at 133% of the poverty level to be covered by Medicaid.  (http://obamacarefacts.com/obamacares-medicaid-expansion.php).  This is akin to the policies of New York being spread nationwide.  Is New York City just the first place to make the preemptive decision to force healthy decisions on its citizens?       

mini big gulpThis is a look into the future for all Americans.  With the government increasingly picking up the tab for healthcare costs, it will create an excuse for control over all citizens’ daily life.  The feared implementation of a “Twinkie tax” (a tax on fatty foods) is nothing compared to the elimination of the unhealthy choices.  Now that the government is covering so many, this will be justified.  If all states accept the new Obamacare Medicaid expansion, America will end up like New York.

The President Can’t Govern

The President’s history of negotiations with Republicans has led to the remarkable feet of making Washington DC even more dysfunctional.  The President has behaved as if the country is split roughly 80-20 in his favor.  Through his negotiations and public pronouncements he has exploited every opportunity where he has had even the slightest advantage.  This has led to the Republicans slowly but surely coming to the conclusion that they can’t trust him and almost can’t work with him.  This is the man we have just elected for 4 moreMy stapler years. 

Politics is like a sporting event, but governing is more like a business.  Much like sports, winning by 1 point (or getting 50.6% of the vote in the recent election) gets the victory.  After the campaign the dynamics change almost immediately.  The winner needs to start working with the party that he just defeated in order to govern.  The rare exception to this rule came in 2009 when Mr. Obama was working with a majority in the House, as well as a filibuster-proof majority in the Senate of his own party.  This allowed him to govern without regard to the Republican point of view.  This situation lasted for 2 years, and the country received Obamacare as a gift from one party rule.  The next election in 2010 was historic in sweeping Republicans back into power in the House, and restored the balance that requires governing like a business.

In a company there are always conflicts between competing ideas or departments.  It is through the negotiations over these competing ideas that people learn about their ability to deal with those who oppose them.  Does the person push every advantage they have or do they realize that a win-win on an idea will help the company?  Unless someone is fired over the disagreement, these two parties must figure out how to work with each other.  This is not that different from the negotiations that must take place in Washington over completely different ideas of how government should work.  This is not new, but the inability of the current President to seek win-win scenarios is.

A perfect example of this is the recent negotiations over the fiscal cliff, which occurred at the beginning of the year.  This was a scenario where the President had the most leverage, in that, if nothing was resolved every person who paid taxes was going to see an increase.  In the run-up to the final deal there were many ideas floated to cut spending.  Replacing the sequester with other cuts, changing the rate of increase for entitlements, means testing Medicare, or raising the eligibility age for Social Security were all possible.  The President, however, used the fact that he had all of the leverage, and allowed none of it.  He made the Republicans swallow hard on a deal that only contained tax increases, extending unemployment, and with zero cuts in spending.  He won.

There is a different dynamic now in place with the sequester.  If nothing is done, spending will be cut, so the leverage is now with the Republicans.  Has the President acknowledged that he needs to deal with the republicans, and been humbled by his lack of leverage?  No. He has decided that he likes it better when the negotiations are winner-take-all, like an election.  This is why in recent weeks, rather than negotiating, he has been campaigning.  These campaign stops have been just like an election with staged events, human props, and scare tactics.  He is doing this even though the most recent election results show that we are roughly a 50-50 country, and his opponents can’t be fired for nearly 2 years.

The President enjoys sports, and as proof we will soon be subjected to the Presidential Bracket with the start of the NCAA Basketball Tournament (a tradition he began).  He, however, has almost no experience dealing with coequals in business.  He was elected to govern, and he simply can’t do it.  To come to this conclusion a little over a month into his second four year term is a bit disconcerting.  Years from now, perhaps when the looming debt crisis is upon us, people will look back on this time and say that we should have solved the problem of our mounting debt.  Perhaps with the passage of time the people will finally point the finger at this President. 

Name That Tax Increase

The weather channel made a unilateral decision this season to start naming winter storms.  The large snowstorms called Nemo and Plato are recent examples of this.  Their argument is that this is a better way to communicate about an upcoming storm and track the destruction, such as has been used for hurricanes for decades.  Some may think that this is silly and unnecessary.  If this helps communicate the impending doom and devastation of a Hurricane or Winter Storm then what is the harm?

obama whisperWe can take a lesson from this rather than scoff at it.  If naming dangerous devastating events is helpful from a communication standpoint, why can’t it be used to warn about the upcoming damage of a proposed tax increase?  Or track its devastation after the fact as we sort through the wreckage that raising taxes causes.  The estimated cost of Hurricane Sandy was over $50 billion.  The cost for Katrina was over $100 billion.  Meanwhile the devastating cost of the January Obama tax increase is $650 billion over the next ten years.  The cost to the economy is so harmful that it’s like a hurricane every year forever!  Since he is so proud of it, a good name for this demoralizing tax increase should be “Tax Storm Barack”.

The news media should track the destruction from “Tax Storm Barack”, much like they would a hurricane.  The tax increase primarily was directed at the wealthy, such as business owners.  These wealthy are similar to the people who live closest to the coast in a hurricane, in that, they are only the first hit by the storm.  Coverage of the effects could be interviews with unemployed people who remained unemployed, since businesses never hired them after the tax increase.  Maybe they could visit yacht manufacturers and talk about the reduction in orders, or turn cameras on a Mercedes showroom where a salesman is asked about his prospects of making his quota this month.  Maybe there is a pro golfer who has laid-off a secretary who can be interviewed.  There should be a large on-screen banner that is labeled “Tax Storm Barack Devastation!”.  They would also have to do follow-ups every month, because the damage keeps hitting as long as the tax increase is in place.

The President wants to increase taxes to avoid the March 1st sequester, so the media needs to start warning about the upcoming storm.  This naming idea needs to have a mechanism to warn about the impending doom.  Along the lines of naming a Tropical Depression, perhaps Tax Depression could be used.  This could also act as a warning that an actual Depression could ensue if the warnings are not heeded.  Since we need to use a different name for each Tax Storm, why not use Harry (for the Senate majority leader) for this one.  Stories could start to be written now about “Tax Depression Harry”, so the citizens could be mobilized to ward off the storm.  If the Republicans fail to hold the line, it will naturally turn into “Tax Storm Harry”.  Names should be simple enough to line up based on seniority in the Democratic leadership, so Nancy could be next.  Maybe there could be some honorary titles like Al or Bill, so older Democrats don’t miss out on the dishonor.  Democrats never run out of tax increase ideas, so there will be plenty of naming of Depressions and Storms opportunities to go around.

Don’t react to the naming of winter storms by thinking it is unnecessary or silly.  Learn from what it tells us about how to communicate to the American people.  This technique can be used to educate the public about the devastating ideas the Democratic Party has for our country.  If this technique can help explain that tax increases are bad, it will be a start. 

State of the Union – Why Don’t They Ask?

The President laid out his agenda in the State of the Union Address, and it was filled with initiatives and statements similar to what he has said before.  It gives the media the opportunity to ask questions that they have neglected in the past.  Statements that were presented as facts also need clarification.  Up until now, the President and the White House press secretary have escaped answering important questions.  We should continue to wonder why the following clarifications and challenging questions are not asked.

Mr. President:  In your speech you spoke about universal preschool.  Almost every study concludes that there can be temporary effects, but by the 3rd grade there is no lasting impact of preschool.  In these challenging budgetary times, why are you pushing for increasing a program that has shown such a universally agreed lack of results?state of the union

Mr. President:  With your interest in raising the minimum wage, can you show any time this policy has led to more employment?  Didn’t unemployment increase when you and a Democratic Congress raised the minimum wage in 2009?

Mr. President:  You said that you have cut two and half trillion dollars of the $4 trillion that economists say is needed to show a sustainable path.  If it is assumed that part of your $2.5 trillion claim is the $1.2 trillion sequester, then why are you advocating delaying and reducing these cuts, before they’re even implemented, while counting them toward this goal?  The figure of $4 trillion was put out more than three years ago.  With your delay in dealing with this problem, many groups have changed it to $6 trillion to make up for the time squandered.  Are you aware of this?  Is there going to ever be a year in our government’s future where we will spend less than the year before?

Mr. President:  You have said that you are waiting for Congress to act on climate change, and if they don’t, you will.  If climate change is truly as devastating to our future as you have expressed, and you have this power that you stated in the speech, then why won’t you act now?

Mr. President:  You said that none of your proposals will add one dime to the deficit. Certainly, most of these proposals cost money.  Can you tell us what you are proposing to cut or what taxes are you proposing to increase in order to pay for each of these new initiatives?

Mr. President:  You continue to reference the Cayman Islands and people having bank accounts offshore as a loophole in the tax code. Can you tell us the loophole in the tax code that you’re referring to, and your proposal to eliminate it?  Could you be misstating the fact that other countries have lower taxes, and it is wise for a company to locate their headquarters outside the United States for that reason?

Mr. President:  You had a very emotional appeal on gun control in you speech.  Gun control has not proven to be effective in reducing gun violence anywhere that it has been tried.  What is your reason for supporting the proposed gun-control legislation?

Mr. President:  You implied in your speech, and have stated in the past, that the Washington “dysfunction” and arguing over policy are causing the economy to underperform.  A time period that you often refer to in terms of economic success is the 1990’s.  During that time, Newt Gingrich was Speaker of the House, and the Republicans controlled the Senate as well.  Their disagreements with President Clinton led to two government shutdowns. This shows how the “dysfunction” in Washington was much worse at that time than it is now.  Shouldn’t we look at your policies and actions to explain the lack of economic performance rather than the fact that there are continuing arguments in Washington?

Perhaps some adventurous reporter will now have the opportunity to ask for clarification on these issues…but probably not.

An Inconvenient Polar Bear

The story this week that hasn’t received much play in the mainstream media is about a new book by environmentalist Zac Unger titled “Never Look a Polar Bear in the Eye”.  His goal was to document the decline of the Polar Bear population.  He undertook this task by moving his wife and 3 children to remote northern Manitoba, Canada.  Normally, books from these types of authors get tremendous coverage since they are usually peddling the latest hysterical fear of what humans are doing to destroy the planet.  The problem in this case is that he found the exact opposite of what he expected.  The problem this presents is that Polar bear with youngit counters an assumed domino effect in the theory of Climate Change:  Global Warming causes the polar ice caps to melt, the lack of ice decimates the Polar Bear habitat, their population goes toward extinction, oceans rise, all humans die.  This book challenges an almost religious orthodoxy on the liberal left.  It does not fit the media template and has been almost ignored.  If this story got the attention that it deserved, there would be the natural question…What else is not true about Climate Change?

It turns out that this story is not that unique.  A recent Canadian Government study claimed that the population of Polar Bears has been increasing since the 1970’s.  The local Inuit people go even further to say that the population is increasing even in areas where the study had population flat or down.  Why isn’t the environmental movement celebrating this fact?  Why can you only find stories about this new book on Fox News?  Why are environmentalists still lobbying the US Fish and Wild Life Service to change the classification of Polar Bear’s from “threatened” to “endangered”?  The ongoing myth about Polar Bears fits the political agenda of Climate Change, and the truth would really get in the way.    

Bison in North America were once headed toward extinction.  It has been reported that their numbers were as low as 2,000 near the end of the 1800’s.  The Bison population has recovered to over 500,000, and it is a wonderful success story about restoring a species.   The wild Bison have come back, and farm raised Bison are popular due to their very lean meat.  Bison burgers are moving from posh eateries to everyday restaurants.  The media has reported this story, and they usually like a feel good story like this.  Yet we have not seen similar attention to the good news about Polar Bears.    

Even before Al Gore’s movie about Global Warming (which he has morphed into Climate Change and now calls Climate Crisis), the NY Times, Washington Post, and the major networks bought into the theory, hook line & sinker.  They are now committed to promoting this belief, regardless of the facts that may surface.  The current President also is a true believer, and is determined to do what he can to, “Heal the planet”.  Eventually, McDonalds or some other restaurant will solve the Polar Bears overpopulation problem with a new menu item.  This does not deal with the shamelessness of the media taking an advocacy position on a issue that will have wrenching policy ramifications.  Lack of reporting on these new facts shows this complicity, and it won’t be solved with a special sauce.

Outgoing taxes

Bobby Jindal, the Governor of Louisiana, has proposed eliminating the state’s income and corporate tax.  His plan is to join the other 9 states that fund their government primarily through a sales tax.  He is attracted to this method by the fact that these states have done better economically.  There are 5 other states Cut taxconsidering lowering or eliminating their income and corporate taxes to attract business to their states.  It is no coincidence that these states are run by Republican Governors, while Democrat led states are raising taxes.   There is a more important reason to change the state’s main source of revenue to a broad sales tax.  This step will help the public hold government accountable.  The voting electorate has been removed from feeling the effects of inefficient government over time, and this change will reverse that trend.    

When any government wastes money, the only way they can be held accountable is by the voters in the next election.  If the majority of the electorate are not affected by this inefficiency, due to the fact that they do not pay taxes, there is little accountability.  Another way that these voters could track the effectiveness of government would be an aggressive investigative media.  With the press bias towards bigger government, this critical eye is missing.  It has been reported that roughly 50% of the cost of the NYC government is funded by 1% of taxpayers.  This, and a lack of media scrutiny, has been a recipe for out of control government.

Most people have such busy lives that it is difficult to track the performance of their various levels of government.  Politicians and governments are notorious for adding all different taxes and fees in order to find new ways to fund their spending.  This shell game has made it difficult for even the most interested voter to understand the efficiency of their leaders.  How easy would it be to keep track of your state government by simply looking at the sales tax?  Maintaining the sales tax will allow spending growth to be matched to the state’s growth in commerce.  The Governor can simply run for reelection by saying I did not raise the tax.

Under the sales tax scenario, imagine if there were a teachers strike.  The way that the press usually reports this event is to typically side with the striking teachers.  Invariably, there are sympathetic reports resorting to pull on the public heartstrings about “the children” and how we cannot risk the future.  Now, a Governor who wants to hold the line on spending can have a simple message by saying that if he/she gives in, the sales tax will go up 1%.  Just think of the difference in the way people will look at this issue.

These moves by Mr. Jindal and other Republican Governors are great differentiators from the Democratic Governor tax raisers.  They are also a good way to bring attention to the economics of the state.  This change ensures a larger majority to be affected by the cost of government, and the consequences of each decision.  Republicans are always trying to make the case that people don’t want bigger government.  Making sales tax the main way that the government is funded not only makes it affect all the people, but gives citizens and easy way to measure their government.

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