Thursday, August 31, 2006

Assembly 97th: The BIG Difference

There's been some fur flying in the race for 97th Assembly. But that's not what we'll mention today.

Rather, it's the Big Issue: taxes and spending in the State.

A detectable difference in the competitors is Kramer's stand that government spending should be controlled by limits set in the state constitution. The hotly debated initiative has failed to clear the Legislature in two forms.

"Taxes should not rise faster than a family's ability to pay them," Kramer said. "Lowering taxes will increase economic activity, and the result is greater revenue for government bodies."

Lufter's response: "I've been fighting on behalf of taxpayers for 15 years. I get involved to see what can be done to change that mind-set by controlling the spending. If you don't control the spending, you'll never get a handle on taxes. You can use fees as taxes, and I'm not for that."

Reducing/controlling spending is the key--that is, Lufter's position is the one which makes sense.

In the end, only spending affects the level of taxes. Don't spend, and you won't tax. On the other hand, guaranteeing an increasing tax-revenue stream WILL lead to spending.

2 comments:

Bill Kramer said...

I want to start by saying that I would not have voted for the peice of garbage that the Assembly churned out in the middle of the night.

You have mixed a theoretical discussion of why taxes need to be controlled with a specific discussion of the Taxpayer Bill of Rights. What I have said all along on the issue is that it matters little whether revenues or spending is controlled. Without a proper, comprehensive definition of either, there are loopholes.

If you control spending: Suppose that the federal government grants $5 million to Waukesha County for homeland security. Without a proper definition, we could not make the necessary improvements because of the spending cap. Conversely, if people drive less because of the price of gasoline, gas tax revenues will be reduced. if the cap is on spending, the gas tax can be raised to get to our spending cap. The same is true if there is a recession; sales tax revenues will be reduced. Should the sales tax be raised to get to our spending cap? Spending controls are fine, but as I have said all along, it must be properly defined.

If you control revenues: Notice the word is revenues, not taxes. This is what we pay for our governemnt services. This is a direct restraint on government's ability to raise money from us. Again, revenues include more than taxes. Therefore, it too, requires a comprehensive definition. If you leave out auto registration fees, hunting licenses, UW tuition, borrowing, or anything else, you can bet what will be raised.

In the end, the important issue is how we define either. What is equally important as defining revenue or spending, assuming that the definition is comprehensive, is the growth factor on which it is based. In most years, personal income grows faster than inflation, so inflation is the better factor. However, during the Carter Administration, inflation grew much faster than personal income, so personal income is the better factor.

I support a Taxpayer Bill of Rights with a comprehensive definition of either spending or revenue tied to a multi-year average of the growth of inflation or personal income, whichever is lower.

Sorry about the length.

Dad29 said...

Yah, Bill, but constitutional Amendments simply cannot be as complex as you suggest. The "definitions" element ALONE will be quite lengthy.

I'd prefer a Legislature which simply and consistently works toward the common good and is a prudent manager of finance.

So when the Cow Jumps Over the Moon, (or when a TPA is passed which is actually comprehensible,) the State may actually become a place that its citizens do not love to hate.

Meantime, I prefer to control spending. Send the money back to Washington and appoint a few special deputies with AR-15's to walk about the place a bit.

By the way--who SAYS that 'the gas tax may be raised to fill the spending cap?' Only with veto-proof (D) majorities...

Thanks for your reply.