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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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