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4/27/2010
Burri: Dems get religion on tax cuts? Don’t count on it

We may not have learned it in school. We may not have learned it from our parents. But somewhere along the line, most of us learned how to keep tabs on a checkbook.

Or is that too optimistic? Most of us do know how to keep track of a checkbook, right? How to write the numbers in; when to add, when to subtract; how to have some idea, at least, of how much money is in there?

Some of us don’t, it seems. Some of us – including some people you’d swear would understand – have no idea how it works. So let’s review, just in case.

A checkbook register has several columns, but two of them are more important than the others: incoming and outgoing. Deposits in one column; withdrawals in another. Add the deposits, subtract the withdrawals, and that tells you how much money you have.

Money in, money out. In other words: revenues, and spending.

At the absolute worst, one hopes, those two columns are equal. You withdraw, eventually, the same amount you deposit. In a more comfortable world, deposits – revenues – will always be a little higher.

Unfortunately, the world isn't always comfortable. Withdrawals are sometimes higher than deposits – spending is higher than revenues. When this happens, you've got a deficit. You have to find more revenues somehow, or – as tough a concept as this is for some people – you have to spend less.

And by “some people,” I mean Congressmen. And, possibly, the reporters who cover them.

This was in The Hill yesterday:

House Democrats are encouraging members to make the tax cuts they’ve delivered a key part of their reelection strategy.

…“We've been talking to our members since the beginning of this Congress about how important it would be to have a strong portfolio on taxes,” said a Democratic leadership aide. “Now it's critically important that our members tout their record on tax relief.”

We could quibble with some of the details, there – they’re tax credits, not tax cuts – but let’s not. Instead, let’s enjoy the fact that Democrats – including President Obama – want everyone to know that they “cut taxes.” Let’s be happy to see Democrats wanting to tout tax cuts – wanting to campaign on tax cuts!

And…why? Because they’re coming around to our way of thinking? They’ve changed their minds about Big Government vs. fiscal libertarianism? They’ve become new converts to Rand, and Hayek, and Smith’s “invisible hand?”

Ha! Hardly. They think they have to tout tax cuts – even temporary tax credits – to position themselves for the elections. That’s all.

Still, that’s good news. Kinda puts a damper on all this Value Added Tax talk we’ve been hearing.

But:

…efforts to win in November on a tax-cutting platform will be complicated by the nation’s record budget deficits, which makes tax hikes look more likely.

…Further muddying the water is the fact that several of the most endangered Democrats have staked their reputations on their commitment to seeing the deficit reduced as quickly as possible.

We have a deficit. That means, as anybody with a well-kept checkbook can tell you, our withdrawals are bigger than our deposits. If we want to fix that, as these "endangered Democrats" want to do, we have to increase revenues – there's those "tax hikes," or…

…or what? Where's the other half of the equation? The withdrawals?

Where's the spending?

That Democrats are talking tax cuts: that's good. That they aren't talking spending cuts: that's bad. They're offering us only half a choice: higher taxes, or mesospheric deficits. We all know there are other options.

I wonder what their checkbooks look like.

Lance Burri blogs regularly via his site, The TrogloPundit

COMMENTS

Tax cuts and deficits: easy for now.
Significant spending cuts: hard.

So, same old song. When 80% of the federal budget is entitlements, defense, interest on debt, where to cut to make a difference? Specifically. Here we go again. Please no overarching philosophy. Where to cut, impact in total dollars saved, impact on programs and percentage impact on budget and deficit. Just start with one response with lets say, a 10% impact on the federal budget. That shouldn't be so hard will it? In my checkbook I can easily find a 10% cut, I can sell my house and rent. So it should be that easy for government shouldn't it?

dave allen (Tue Apr 27 06:46:49 2010)

Dave, your comment is confusing. It very much sounds like you're saying it really is just too darn hard.

Well I'm not here to say it's easy, but it's been decades of the same lame excuse. It is exhausting.

Should we just throw our hands up in the air and give up?

The first steps to fixing a problem are identifying and acknowledging it:
2 2 = 4
4 - 5 = (-1)
OOPS!
We only have 4. Perhaps it's time to cut that 1 we were spending on Research Grants to the Institute of Finding Ways To Get A Monkey On Planet X To See What Sounds It Might Be Able To Make And Whether It Can Smell Bacon From That Far Away.
Or that 1 we were spending on the Bureau of Entreprenuerial Red Tape.

"The problem with the French is that they don't have a word for entreprenuer."

The problem with America is that you can either pick the guy who said that, or the guy who's really really smart but probably plans on enslaving your children.

But let's just keep talking about how hard it is to change that.

Dave, tell me it ain't so!

Andrew Ellis (Tue Apr 27 11:04:20 2010)

Andrew,
I'm not saying it is so hard to identify something. But your response that has no facts implies that you think it is hard. Just come out and identify something that You will cut to save 10% from the budget, real numbers and impacts. No philosophical mumbo jumbo. It's simple really. What would you cut???

dave allen (Tue Apr 27 11:32:04 2010)

Guys, there is one simple formula you need to understand: campaign cash buys government spending which increases taxes. Get it?

Cut the corruption and taxes will go down!!! For one, we won't be spending taxpayer dollars on roads to nowhere. Think: expressway between Eau Clare and Superior; I94 widening to Chicago. And now they want to tear down the Hoan bridge and build another, and rework the perfectly good Oconomowoc Interchange.

Get real. Only eliminating the cash flow between the special interests and the politicians that spend money is going to fix taxes.

Jack Lohman (Tue Apr 27 12:09:35 2010)

Jack,
I agree with you that the system is self reinforcing. One man's waste is another man's bridge however. Even if all the earmarks were eliminated it would be less than a 1% impact. So, you gotta go big. Go where the money is. What would you cut to make a 10% impact? Specifically.

dave allen (Tue Apr 27 14:07:30 2010)

Cut everything that is not properly the domain of the federal govt, which isn't much. Check out "Not Yours to Give" by David Crockett, which helps explain this.

emily matthews (Tue Apr 27 15:57:54 2010)

The first thing, Dave, is you get the corruption out of the government, both state and federal, and let the politicians apply common sense that is not based on their pocketbooks. If the biggest of them all, the defense industry, were not padding the pockets of our politicians, would we be involved in so many wars? Would we be paying five times for private troops than we do our government troops?

At the state level I don't know that there is one 10% chunk that can be eliminated, but accumulative I think we can get close. And I agree with Emily; we have to cut the Feds purse strings. But we can't do that with the campaign cash flowing.

Jack Lohman (Tue Apr 27 17:43:25 2010)

Jack: Campaign cash, from whatever source, is used 1.) to get re-elected and 2.) for personal gain should the candidate choose not to run again.

That number 2 provides too much incentive for personal gain, so let's say when someone stops running, leftover campaign funds have to be dumped into the account that funds the legislative payroll. In other words, let's say it's not personal income. (I haven't thought this all the way through, and I'm not sure it's a GOOD idea, but it's just an idea.)

Taking away that incentive (private monetary gain for legislative favors), leaves a political "career" as perhaps the only remaining illigitmate incentive. So put those jobs back where they belong - part-time minimal compensation - and the only remaining incentive to seek office is to actually SERVE.

Both of these would significantly reduce the corruptibility factor. The only thing left to "gain" by being in office is to represent the core values and principles you're passionate about.

Dave, moving on to cuts: Again, just an idea, not thought through all the way.. and State here, not Fed:

Initiate a mandatory 10% budget/spending cut across the board - all departments. Every dept forced to seek efficiency improvements. Any dept that fails is penalized by funding anything over out the payroll for those departments. Everyone is forced to THINK and to work as a team (something entirely lacking in government jobs where no one is held accountable to anything - this gives people the incentive to work hard and work smart). Each dept documents what they did and how they did it. It's all reveiwed, and successful ideas can be considered for implementation on a broader scale. Meanwhile it'll weed out the useless people and leave open slots for more responsible and deserving employees.

Meanwhile, establish a task force of WI citizens, elected in their respective assembly districts, for a one-time, low-paying 2-year term to review all legislation passed for the last 50 years that created any kind of new department, bureau, or program, and in order of most-costly to least-costly (they have 2years and that's all) assemble a formal recommendation on which programs, bureau's, or departments to do away with, taking into account in this order 1) the constitutionality of the law, 2) the tax burden it creates, and 3) the effectiveness of the program or body. The findings are published statewide at the beginning of the 3rd year, everyone has six months to communicate with their assemblypersons and senators, and in the next legislation session the legislature has to enact law repealing a minimum of 50% of the total recommendations.

This maintains our republican form of government, giving citizens the opportunity to do some real fact-finding, pressure their representatives, replace them if necessary, and still leaves the final say in the hands of our elected representatives, who (in the assembly at least) will have gone through an election cycle.

Go ahead and call it the POPULAR Bill; "Principle Over Politics: Unanimous Legislative Action Review"

It's just an idea.

Andrew Ellis (Wed Apr 28 10:16:45 2010)

Andrew, I don't think leftover campaign funds can be used personally, even after leaving office.And as well, as long as cash keeps politicians in office, they can gain personally from that power.

Here are a number of political fixes at It’s time for a smaller state legislature that should be considered, but also recognize that what's good for the public is not necessarily good for the politician, and they hold all of the cards. Unless we vote them out, of course, which we should do out of principle.

Jack Lohman (Wed Apr 28 11:03:56 2010)

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