Column: Raising taxes no way to make money
12/6/2009 6:00:00 AM
By Rich Thurlow
If I may be so bold as to venture an opinion ...
It may be true that no one ever asks how much the room tax is when they check into a motel. That point was made when the Kingman City Council was contemplating raising the local rate.
What is beyond dispute is that when that tax money is gobbled up by yet another government entity, it won't be spent in the private sector. I suspect the city could have collected just as much revenue by simply advertising that hotels and motels here charge next to nothing (2 percent) in room taxes. Put that message on billboards on I-40 and U.S. 93 and see what happens. Put it on city stationery - "Lowest Room Taxes in the West!" - and ditto with the chamber of commerce.
I also suspect a similar approach on the federal level shortly after President Obama took office would have quickly pulled this country out of its recession. Rather than passing the porkapalooza, which will be a drag on the economy for years as the U.S. and its taxpayers struggle to pay off the debt, Congress and the president should have teamed up to give Americans more money by slashing the payroll tax to zero immediately, then phasing it back in over a six-month or one-year period.
That would have given both employers and employees extra cash and a confidence boost at a time when the economy needed it. Instead, we got road work that should have been paid for back when Congress was throwing away $250 million for bridges to nowhere.
We also got money that was funneled into state governments to help balance budgets that couldn't be sustained because they were built on the assumption the same level of cash would always keep flowing in. Now Arizona is struggling to make budget cuts that were put off months ago thanks to a non-recurring infusion of our tax dollars from Washington.
Maybe, just maybe, the cuts state government still faces wouldn't be as severe if the payroll tax was slashed in February and sparked the economy.
And that leads us to the "threat" that state government just might have to shut down if the Legislature and Gov. Jan Brewer can't figure out how to cut spending by 25 percent or more. Quite frankly, just keeping the highway patrol in business is about all I expect out of Arizona, so the phrase "shut down state government" hardly has me trembling in me boots.
But one simple approach to the state's budget is to look at the revenue, figure out what was in place the last time Arizona had that much money to work with, and retreat to that point. If that means laying off employees, ending programs and cutting salaries, so be it. Kingman and the surrounding area lived without the Kingman Ranger helicopter for 120 years. It's a perk we can't afford now.
If that sounds draconian, then just adjust employee salaries down to what we can afford. But for crying out loud, don't raise taxes.
And speaking of tax increases, did you take a look at the synopsis for the Senate "healthcare" bill? You know, the one that's chock full of new levies. Taxes on insurance companies, drug makers, medical device manufacturers and elective cosmetic surgery certainly don't sound like a sure-fire recipe for lowering my healthcare costs, which I seem to recall was one of the reasons for this overhaul.
Is it just me, or does raising taxes on health insurance companies - those evil folks who make an exorbitant 2-percent profit - make it likely the cost of premiums will increase? And taking away an insurance company's right to decide who it wants to insure based on pre-existing conditions sounds about as bright as fining lenders who don't make home loans to people with a pre-existing condition - an income level that makes it unlikely they'll be able to handle the payments.
We all know how well that worked out.