An Obvious Example Of Economic Growth

The Washington Examiner posted an article today about job growth in Texas since the recession began in December 2007.

These two charts tell the story:

So what is the secret? The article reports:

For starters, Texas does not collect an individual income tax or a corporate income tax. It does collect a gross receipts tax. Still, the Tax Foundation’s 2015 State Business Tax Climate Index says Texas has the tenth best business tax climate in the U.S.

Texas has one of the highest sales taxes in the nation to make up for lost income tax revenue. The combined state and average local sales tax rate of 8.15 percent is 11th highest in the nation. However, sales taxes are more efficient than income taxes, since they don’t punish work.

Texas is also a right-to-work state, which studies have shown is better for the economy. Texas is the freest labor market in the country, according to the Mercatus Center. Their labor market freedom rankings include right-to-work status, in addition to minimum wage laws and workers compensation regulations, among other factors.

It seems to me that Congress and the Obama Administration could learn a lot about economics from Texas. Hopefully the new Republican Congress will copy some of the things that have worked in Texas.

With Total Disregard For Small Businesses

One of the lead articles in today’s New Bern Sun Journal was entitled, “Online marketers called on to collect sales taxes.”

The article states:

The National Association of Counties joined collective groups of cities, mayors, and state governments last week in a Capitol Hill briefing that called on Congress to pass legislation forcing online marketers to collect sales tax.

Craven County Commissioner Scott Dacey, vice chairman of the Craven board and its delegate to NACo, spoke for counties and was one of these speaking for NACo on the importance of this issue and its impact on counties.

What about the impact of the businesses involved? An internet business usually does business in many areas of the country. Different areas of the country have different tax laws–different tax rates, different items taxable, different tax rates on different items. Has Commissioner Dacey or any of the other county executives considered the burden they would be placing on small business owners with this tax? How many clerical workers will the average internet business have to hire to track taxes and input information into the computer? How many programmers will have to rewrite the computer codes of these businesses to comply with the law? What will be the administrative cost to the average internet business? Very large internet businesses like EBay and Amazon may be able to cope with the additional expense, but the impact of this law will be to drive the small businessman off the internet. Commissioner Dacey and other country executives, is your intention to take away small businessmen from the internet? If you are not intent of driving small companies off of the internet, you need to rethink your proposal.

The Tax Increases In Massachusetts Take Effect Today

CBS Boston reported today that Massachusetts is increasing taxes on gasoline and cigarettes (effective today) and adding a 6.25% sales tax on computer software services.

The gasoline tax in increasing 3 cents a gallon, it will now be 24 cents a gallon, and the cigarette tax will be increasing $1 to $3.51 per pack.

On Monday, The Examiner reported:

Massachusetts made state history July 29th by implementing a new gas tax increase that is pegged to inflation. The new tax that takes effect Wednesday, following an override of Governor Patrick’s veto, adds 3 cents to the state’s already relatively high 21 cents per gallon tax. Adding in federal taxes, the total tax on a gallon of gasoline in Massachusetts is now 42.4 cents per gallon. Depending upon which grade is chosen, drivers now pay about 11 percent in taxes for the gas they use. That is the highest tax rate of any product one can buy in Massachusetts except cigarettes. Smokers also saw a one dollar tax increase per pack in this new bill.

Please note–THE GAS TAX INCREASE IS PEGGED TO INFLATION. This means that elected officials in Boston can avoid responsibility for future tax increases. The tax on gasoline will automatically increase, and the legislators can say, “I didn’t do that–it was automatic.” Governor Patrick vetoed this bill–therefore he can claim that he did not vote for the tax increases in it (of course he knew that the Democrat legislature would override his veto and still be voted back into office in the next election).

Until the Massachusetts voters begin to vote the current legislators out of office, they can expect more of this kind of shenanigans. It’s time to wake up and put people in office who actually care about the burden they are placing on taxpayers.

 

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Congress Is Preparing To Make Another Mess

Today’s Wall Street Journal posted a story on Congress‘ latest attempt to grab more of your hard-earned money. That’s not really anything new, but every now and then their chutzpah amazes me. Last Tuesday a bill was introduced that would impose a sales tax on the Internet. It may be voted on as early as tomorrow. I am sure all of the people voting on it have read and understood it, right?????

The article reports:

For Senators curious about what they’re voting on, it is the same flawed proposal that Mike Enzi (R., Wyo.) introduced in February. It has been repackaged to qualify for a Senate rule that allows Majority Leader Harry Reid to bypass committee debate and bring it straight to the floor.

Mr. Enzi’s Marketplace Fairness Act discriminates against Internet-based businesses by imposing burdens that it does not apply to brick-and-mortar companies. For the first time, online merchants would be forced to collect sales taxes for all of America’s estimated 9,600 state and local taxing authorities.

New Hampshire, for example, has no sales tax, but a Granite State Web merchant would be forced to collect and remit sales taxes to all the governments that do. Small online sellers will therefore have to comply with tax laws created by distant governments in which they have no representation, and in places where they consume no local services.

I thought we settled this ‘taxation without representation’ thing a few hundred years ago.

The article continues:

Meanwhile, New Hampshire’s brick-and-mortar retailers will bear no such burden. They will not be required to collect taxes on the many customers who drive across the Maine and Massachusetts borders to shop in New Hampshire. Bill sponsors say it would be too big a hassle to force traditional retailers to ask every walk-in customer where they live, but these Senators are happy to impose new obligations online.

This has the potential of being a worse mess than ObamaCare. Let’s remember who votes for this and vote them out of office next year.

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You Can Depend On Politicians To Want More Taxes

In Massachusetts you can always depend on the leaders of the Commonwealth to want to raise taxes. This is loosely related to the fact that the majority of the leaders in the executive and legislative branches of government In Massachusetts are Democrats. Well, this year is no exception to the rule.

Holly Robichaud posted an article in the Boston Herald today about Governor Patrick’s latest tax plan and the political theater surrounding it.

The article in the Herald reminds us of a few basic facts:

To sell Speaker Robert DeLeo’s $500 million tax package, there is a whole lot of political theater being staged to fool low information voters into being grateful it’s not Gov. Deval Patrick’s $1.9 billion plan.

When initially announced last week, Patrick pounced by stating that no Democrats lost their seats because they voted for his sales tax increase in 2009. There are Deval’s statements and then there are the facts. In 2010, the GOP doubled their numbers in the House.

It might be a good idea for Democrats to remember the consequences of raising the sales tax as they prepare to vote on the present tax bill.

Ms. Robichaud also notes that Democratic Party Chairman John Walsh has publicly warned Democrats that they will face challenges in primary elections if they do not support higher taxes.

I have lived in Massachusetts since 1978. I have spent a certain amount of that time wondering what in the world was in the water that caused the residents to vote the way they do. We are responsible for the government we have–we elected it. Until the voters of this state wake up and decide to protect their income from the kind of fraud we see in the EBT program and the constant demand for more of our money from the statehouse and legislature, the political theater surrounding tax hikes will continue.

I will be leaving Massachusetts by the end of this year and resettling to a place that has more respect for the fact that I wish to keep the money I earn. I will continue to blog about the perils of big government and its endless appetite for taxpayers’ money, but I will be glad to be in a place where that appetite is slightly smaller. More to follow…

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Reaping The Rewards Of A Well-Run State

Reuters reported yesterday that Louisiana Governor Bobby Jindal has proposed a plan to simplify Louisiana’s tax code to make it more friendly to business. The Governor’s plan is to eliminate all corporate and personal income taxes in a way that would be revenue neutral.

The article reports:

But political analyst Maginnis (John Maginnis) questioned whether the Republican-majority Louisiana legislature would endorse Jindal’s ambitious plan.

“Any tax increase (such as sales tax) or elimination of exemptions would require a two-thirds vote, a form of legislative approval that would require (Republican) solidarity and significant Democratic support,” Maginnis said.

Jindal said his team will meet with lawmakers soon to discuss details of his tax reform plan.

“Eliminating personal income taxes will put more money back into the pockets of Louisiana families and will change a complex tax code into a more simple system that will make Louisiana more attractive to companies who want to invest here and create jobs,” he said.

There an important lesson in this idea. Raising taxes slows economic activity and does not necessarily result in an increase in tax revenue. Lowering taxes increases economic activity and often results in increased tax revenue.

During the 1980’s President Reagan lowered taxes. This resulted in an increase in revenue taken in by the government. Because the Democratic congress never kept their promise to cut spending, the federal deficit did not decrease, but federal revenue did increase.

Lower taxes mean more economic activity. Washington needs to learn that lesson.

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Quietly Placed Inside The National Defense Authorization Act…

On Tuesday, the Daily Caller reported that an amendment has been added to the National Defense Authorization Act that would introduce sales tax to items purchased on the internet. The Computer and Communications Industry Association opposes this move.

The article reports:

“This proposal, and other online sales tax collection proposals like it, would allow states to penalize the innovative e-commerce business model by targeting small online businesses as convenient sources (and collectors) of revenue,” said CCIA President and CEO Ed Black.

The Marketplace Fairness Act, and its House counterpart the Marketplace Equity Act, seek to clarify, and arguably overturn, a 1992 Supreme Court ruling that requires retailers to have a physical presence in a state in order to collect sales tax on goods.

Is there any length Congress will not go to in order to take money away from the people who earn it?

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