Desperate states–from coast to coast

The New York Times reported on its front page (March 28) that states from coast to coast “are considering new taxes on virtually everything: garbage pickup, dating services, bowling night, haircuts, even clowns” to generate more revenue to maintain the record level of spending throughout the country.

The article describes the horrendous fiscal conditions of the states:  “Pension funds are in the red, federal stimulus help will soon vanish, and revenues from traditional sources like income and property taxes are slumping ever lower, with few elected officials willing to risk voter wrath by raising them.”  In short, we are witnessing the inevitable collapse of the welfare state not only at the national level, where the annual budget deficit will be at least one trillion dollars for years to come, but also at state and local levels.

Given the financial shortfalls states are experiencing throughout the country, there is an air of inevitability that they  will increase taxes on services to close their budget gaps.

According to the Times article, “…some believe the notion is certain to grow more palatable as states grasp the depths of their woes. State Senator Cap Dierks of Nebraska, who has pushed for a services tax in part because of his worries about the mounting burdens of property taxes on farmers and ranchers, said he thought such taxes were inevitable. ‘I got a lot of negative vibes when I introduced it, but eventually, we’ll have to look at it,’ he said. ‘What else are you going to do?‘ ”  (emphasis added)

Earth to Cap Dierks.  You can do several things to avoid punishing taxpayers and refrain from harming your state’s economy–reduce spending and privatize government services.  Senator Dierks makes the egregious error when it comes to government spending, namely, that the people value government services.  If he is right, then people all over the country should gladly pay higher taxes to maintain the current level of spending.  In other words, if the people of Nebraska or any other state for that matter want to retain welfare expenditures, then they should demand that the politicians impose higher taxes on them.

Let’s face reality, people hate paying taxes, except for the naive who think government is doing a wonderful job managing the welfare state, or the hard core collectivists who think that government should tax and spend to perpetuate a welfare state, because it is the right thing for a civilized society to do, take care of not only the poor and disabled but just about everyone.

For decades the American people were told by editorial writers, economists, pundits, and others that the “best and brightest” from Ivy League universities would use sound financial management tools to promote the general welfare by funding the welfare state–public education, food stamps, housing programs, Medicaid, Medicare, Social Security, agricultural subsidies, and the list goes on endlessly.

Needless to say, eventually the cost of these programs at some point outstrip the ability–or desire– of the public to pay for them.   We are at that point.

So, instead of hiking taxes to redistribute income and continue to fund the failed programs of the welfare state, politicians should reconsider the role of government in our society.  But governors like Democrat Ed Rendell of Pennsylvania have the typical tunnel vision of Establishment politicians, they propose to raise revenue by extending the sales tax to more services to pay for the unsustainable programs of welfarism.

Hiking taxes will only add fuel to the tax revolt that is underway and postpone for a short period of time the inevitable, the total collapse of the welfare state.  Only more free enterprise and nonprofitization can restore our economy.

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