So, Andrea Neal has a column where she talks about Gov. Daniels’ vision for a “rebate” of tax money. His formulation reminds me a lot of what we heard when the Bush administration was using the Clinton-era surpluses as an excuse to restructure the tax burden to tax low income people a little less and upper income people a lot less.
After government has (achieved) a balanced budget and a savings account to protect it, you quit collecting money. Just leave it with the folks who earned it.
What will never be discussed in this sort of formulation is much consideration of what it means to “earn” your money. A lot of folks will say that it’s not up to government to determine whether you earned your money. And maybe they’re right. But, I think it’s a little disingenuous to automatically conclude that, because someone acquired money – even legally – that they necessarily earned it. What Daniels is really saying here is, leave it with the people who have it, regardless of whether they earned it.
Beyond that, I stopped reading Neal’s column when she regurgitated some of the talking points of the Daniels Economic Miracle ™ about Indiana weathering the economic storm better than its neighbors. Apparently she didn’t get the memo that the “hot streak” talking points are non-operative following the 2008 election, what with Indiana’s dismal job situation. Having a balanced government budget while your citizens flounder is a little like having a box of money buried in the back yard while your children go hungry.
I’m sure that there are situations where people don’t deserve the money that they are paid. But in a society and an economy as complicated as ours, how would one prove this in every case, or even in the majority of cases?
Better to take Mitch’s position, especially if you are a politician that needs to get elected!
On another note, Mitch has a subtle but excellent point. One of the problems with income and sales taxes are that they have booms and busts. And in a democracy with elected representatives, if there is a boom in revenues, it will get spent by politicians trying to buy votes.
So Mitch’s idea takes care of the busts by building reserves, and takes care of the booms by automatically refunding taxes. It’s a very good idea.
Of course we don’t have a balanced government budget. Indiana owes the Feds $2 billion dollars after borrowing to keep the unemployment fund solvent. The smart thing would’ve been to fix the problem 6 years ago during the last boom, but the childish no tax increase under no circumstance foot stomping made that impossible.
Let’s not even get started on the accounting tricks his administration used when distributing some of the federal stimulus dollars to schools.