Framing the Dialogue

Parsimony – Taxing Effort

I find it very interesting that a good number of these posts use an Associated Press story as the baseline for my commentary. I don’t seek out AP stories, but it often seems like their reporting often shows the bias of the mainstream media.

First the headline (with a link to the original story)…

GOP moves toward slashing, nixing states’ income tax

…Now the story

OKLAHOMA CITY — A year after Republicans swept into office across the country, many have trained their sights on what has long been a fiscal conservative’s dream: the steep reduction or elimination of state income taxes. [So far so good]

The idea has circulated among academics and think-tank researchers for years [The illusion that this is some academic exercise, a wet dream of conservatives, a no so realistic or reasonable idea.]. But it’s moving quietly into mainstream political discourse, despite the fact that such changes would almost certainly mean a rewiring of tax systems at a time when most states are struggling in the aftermath of the recession. [Here is the Democrat and hence the mainstream media stance that it is unrealistic to make changes in tax codes when states are struggling.]

“I think there’s going to be more action that way,” especially as Republican governors release their budget plans, said Kim Rueben, an expert on state taxation at the Brookings Urban Tax Policy Center. [BTW the Brookings folks are a liberal think tank – you’ll notice later that the American Enterprise Institute is labeled a “Washington-based conservative think tank – no bias here]

Last year, GOP lawmakers in many states quickly went to work on a conservative agenda: restricting abortion, cracking down on illegal immigration, expanding gun rights and taking aim at public-employee unions. [Much as Democrats in power look to increase abortions, promoting illegal immigration, restricting our 2nd Amendment gun rights, and pumping more money and power into public-employee unions. Most Americans are pro-life, anti-gun control, anti-ILLEGAL immigration, and concerned about our tax dollars being laundered through public sector unions and given to Democrats for their campaigns. Perhaps rather than call them a “conservative agenda” it would be more appropriate to call them and American agenda.]

Emboldened by that success, the party has started income tax efforts in Idaho, Kansas, Maine, Missouri, Ohio, Oklahoma and South Carolina. But it’s not clear how those states would make up for the lost revenue, and Rueben said she’s not aware of any state in modern history that has eliminated an income tax. [lest we forget these efforts were actually started by the Americans that voted these folks into office and tossed the others out. That is an important factor to consider. These are the types of efforts that the taxpayers demand and expect. Many progressives fear the loss of income tax since most citizens are so used to withholding that they really never think about how much is being taken from them.]

Nine states get by without an income tax, mostly by tapping other sources of revenue. Nevada and Florida rely on sales taxes that target the tourism industry. Alaska has taxes on natural resources, and Texas imposes substantial property taxes. The other five states are: New Hampshire, South Dakota, Tennessee, Washington and Wyoming. [Nine states is a good start. I happen to work for a state agency and rather than my salary be paid by general funds, my salary could be easily paid by those folks who are required to use our services. Those who require my services should bear the cost rather than everybody. It would be fairly simple as long as fees are adjusted frequently based on the market and demand.]

But in the rest of the country, income taxes pay for bedrock government services, including roads, bridges, schools and prison systems. [This is some more bias. They did not include major social programs like welfare and other expensive entitlement programs. They also failed to mention that a great deal of the money for roads and bridges come from another tax – your gasoline tax.]

In Oklahoma, Republican Gov. Mary Fallin says gradually cutting the top income-tax rate of 5.25 percent will make the state more attractive to businesses, help spur economic growth and ensure Oklahoma is competitive against neighboring states such as Texas. Although the personal income tax does not apply to corporate earnings, supporters say company executives and employees will prefer to live in a state that doesn’t tax personal income. [As companies find it easier and better to relocate the competition will be fierce between states. Companies care about their employees and attracting good ones to states without income taxes is a selling point.]

In Ohio, Gov. John Kasich’s 2010 campaign included a pledge to phase out the state’s personal income tax, though without a timetable for doing so. Thus far, the state’s fiscal situation has stymied the governor’s efforts to achieve his goal, other than implementing a previously scheduled income tax cut. [No the Democrats have stymied Kasich’s efforts.]

Without creating an alternative funding system, “it’s clearly irresponsible to propose taking action against the income tax,” said Alan Viard, an economist with the American Enterprise Institute, a Washington-based conservative think tank. [I wonder what the whole quote was since the AP writer had to cut it so creatively.]

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