March 24, 2017

Are Too Many People Still Dependent on Government?

According to a Rasmussen Reports poll reported yesterday, "Americans continue to feel that too many people are getting financial help from the government and that anti-poverty programs just make the problem worse."

Here's how the polling firm put it:

"A new Rasmussen Reports national telephone and online survey finds that 55% of American Adults think there are too many Americans dependent on the government for financial aid, although that’s down from the mid-60s in surveys over the last four years. Only 13% say not enough people are being helped by taxpayers. Nineteen percent (19%) believe the current level of dependency is about right, while another 13% are undecided. (To see survey question wording, click here.)"

Links available at the Rasmussen website. Survey methodology is available at the web link. In addition:

"The survey of 1,000 Adults nationwide was conducted on March 20-21, 2017 by Rasmussen Reports. The margin of sampling error is +/- 3 percentage points with a 95% level of confidence. Field work for all Rasmussen Reports surveys is conducted by Pulse Opinion Research, LLC. See methodology."

In a related poll, or survey, reported a day earlier, Rasmussen Reports said:

"Most Americans still think welfare programs in this country are being abused.

"A new Rasmussen Reports national telephone and online survey finds that 56% of American Adults think the bigger problem with welfare programs in the United States today is that too many people are receiving welfare who should not be getting it. Just half as many (28%) disagree and think the reverse is true: That the bigger problem is that too many people who should receive welfare do not. Sixteen percent (16%) are not sure. (To see survey question wording, click here.)"

Meanwhile, they also reported on Tuesday, "A new Rasmussen Reports national telephone survey finds that 51% of American Adults think the government spends too much on poverty programs. That’s up 13 points from 38% in April 2011. Just 21% feel it doesn’t spend enough, while 20% say the amount spent is about right."

March 23, 2017

U.S. Business Taxes are Highest in the World

In an editorial two weeks ago, Investors Business Daily (IBD) wrote, "American businesses face the highest tax rate in the world, a new report says. We already knew it faced the biggest regulatory burden. Is it any wonder then that the prospect of lightening the load has led to rising stock prices and more jobs?"

The IBD editorial explained in part:

"The Congressional Budget Office, in a study released last Wednesday, noted that U.S. corporations now face a 39.1% tax rate, the highest statutory corporate tax rate in the wealthy G20 group of nations. The U.S. was in third place, but both Japan and Germany — wising up to the fact that higher taxes hurt economic growth — recently cut their corporate rates, leaving the U.S. atop the tax heap.

"The United States made no change in federal corporate tax rates between 2003 and 2012," said the CBO, "and by 2012, it had the highest top statutory rate in the G20."

"This may be a big reason why American companies now have an estimated $2.4 trillion parked overseas — they don't want to be hit by absurdly confiscatory tax rates when they bring it home."

Read the complete editorial here.

Here is the link to the Congressional Budget Office (CBO) report.

IBD concludes their editorial by writing:

"As we note above, businesses are showing a little spring their step. And the stock market, as measured by the S&P 500 Index, is up nearly 11% since Trump was elected. Investors clearly expect more than 2% growth.

"Trump can do a lot to shrink the regulatory state. But that high corporate tax rate is worrisome. Sen. Majority Leader Mitch McConnell says tax reform must wait until next year. But why wait? Republicans have a great chance to turn the economy into a growth machine. It would be a shame if their political dithering blew it."

Growls readers are urged to make their views about the competitiveness of the United States' corporate income tax rate known to their representatives in Congress. Contact information is available at the Library of Congress' Congress.gov. Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -- write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

Ask for a written response. And tell them ACTA sent you.

March 22, 2017

Pennsylvania City of Altoona Scraps Land Value Tax

According to Washington Examiner's economics writer, Joseph Lawler, last month, "An experiment in truly bold tax reform quietly died last summer, when the Pennsylvania city of Altoona scrapped its land value tax."

Lawler explains in part:

"Starting in 2011, the small city in central Pennsylvania employed a tax system unique among U.S. cities. It taxed properties based on the value of land, not on the value of structures.

"As the only example of a town with a land value tax, Altoona was the incarnation of tax economists' dream. Despite support from economists across the political spectrum, however, the tax eventually foundered on the realities of administrative complexity and politics in Altoona.

"Land value tax proponents have sought to experiment with a 100 percent land value tax since the idea was popularized by 19th-century political economist and journalist Henry George. George suggested land value taxes as a way of rewarding strivers and business owners who build up cities and generate commerce — and of denying financial returns to owners of land merely because they happen to own the land.

"The concept has strong intellectual support. Milton Friedman, the father of modern free-market economics, called the land value tax "the least bad tax." That logic is simple: Taxing discourages whatever it is that is taxed. Tax income, and you will get fewer workers working fewer hours. Tax investment, and you will get fewer new ventures and smaller factories. Tax land, however, and the supply of land remains the same.

"More recently, the land value tax has received interest from the Left . . . ."

Lawler added:

"Losing population and tax base, Altoona began trying out the land value tax in 2002 on the recommendation of the Center for the Study of Economics, a Philadelphia think tank that advocates land value taxes.

"In 2011, the city began levying taxes solely on land value and not at all on property value.

"Joshua Vincent, the head of the Center for the Study of Economics, portrayed the reform as a way to boost a struggling city. Altoona, he said, was out of the "economic mainstream now, sort of flyover country if you will. They were stuck with vacant land and had no practical way to attract investment."

"The idea was that, by eliminating taxes on building, the land value tax system would spur construction and increase density in the downtown area."

In concluding remarks, Lawler wrote, "the trial run in Altoona may have helped advance the goals of Henry George and his intellectual followers. City officials said that while the tax was in place, it earned interest from national media and places as far away as England and elsewhere in Europe intrigued by land value taxes."

So, kudos to the Altoona city council for their willingness to experiment with Henry George's land value tax, and even more kudos for being willing to letting the tax die when it eventually foundered. Were it that most other legislators were that wise?

Read Joseph Lawler's entire article here.

March 21, 2017

What Will Trump Budget do to Local Region?

As reported by Vox last week, "On Thursday, President Donald Trump released his outline for next year’s federal budget, titled “America First: A Budget Blueprint to Make America Great Again.” In it, he proposed major cuts to federal spending, with the Environmental Protection Agency, Department of State, and Department of Labor among those hardest hit. He also proposed spending increases on Department of Defense and other US military operations."

How would such federal budget cuts affect the local economy? A three-page research report from the Stephen Fuller Institute at George Mason University yesterday takes a look at the direct effect, which the Trump budget might have "on federal activity in the Washington region." Following is the report's executive summary:

"The net direct effect of the Trump budget, if implemented as proposed, would result in

  • a decrease of from 20,000 to 24,600 federal jobs, taking between $2.3 and $2.7 billion of federal salaries out of the economy,
  • a decrease of from $800 million to $1.2 billion in federal procurement spending, resulting in a loss of up to 12,000 private sector contractor jobs, and
  • a decrease of $1.1 billion in federal grants in the Washington region.

"Overall, federal spending in the region would decrease between $4.2 and $5.0 billion, the equivalent of reducing region’s Gross Regional Product growth rate by about one percentage point.

"These (estimates) assume that employment and procurement changes will occur proportionally to budget reductions by agency and are shown in the tables below based on the current location of the activity. However, it is likely that activity will shift, both within the region and the nation. Within the region, jobs may be consolidated into owned space, which is more concentrated in the District, or into longer-term, lower-cost leases. Similarly, jobs are likely to be consolidated into the main offices, largely located in the region, from other places in the US, unless there are directions to do otherwise."

The Stephen Fuller Institute's report goes on to discuss federal employment, federal wages and salaries, federal procurement. and federal grants in greater detail. Short tables are included to increase understandability. A .pdf version is also available.

Will Arlington County officials take these estimates into consideration as they formulate the FY 2018, and beyond, budgets? Let's certainly hope so.

March 20, 2017

A Thought about Dependency on Entitlements

"The consequences for those trapped in entitlements are forbidding. Getting a job means losing your situation—in housing, health care, and so on, with criminal penalties if you don’t come clean about making more money. The authorities play along in the enforcement/judicial system because it brings them more business, as the brave new entrants to the real workforce are tagged as “offenders.” Ordinarily, we’d call this enserfment, or worse.

"The working class, in the 2010s, faces hurdles surely unprecedented in our star-spangled history to do just that, work. Thanks, Obama. Or maybe it is thanks, Nancy Pelosi. You recall after she waved through Obamacare in the House in 2010/11, she said it will free up people to discover themselves, namely not to work. How prescient that unfortunate creature was."

~ Brian Domitrovic

Source: his October 16, 2016 column at Forbes.com.

                                        - - - - - - - - - - - - - - - - - - - -- - - - - - - - - -

In his Forbes columns, Mr. Domitrovic writes "about how history can help illuminate the economic challenges we face today, and how very often historical sources do validate free-market economics. I’m author of what’s now the standard history of supply-side economics, "Econoclasts: The Rebels Who Sparked the Supply-Side Revolution and Restored American Prosperity" (2009)."In addition, he and Larry Kudlow "recently published a book on the history of the great John F. Kennedy tax cut and its influence on both the 1960s and the 1980s, "JFK and the Reagan Revolution: A Secret History of American Prosperity" (Portfolio, 2016)." (Source: his Forbes biography)

March 19, 2017

A Thought about the Purpose of Welfare

“Welfare’s purpose should be to eliminate, as far as possible, the need for its own existence.”

~ Ronald Reagan

Source: Article by Kyle Becker, Independent Journal Review. Also Goodreads.com.

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"Ronald Reagan, originally an American actor and politician, became the 40th President of the United States serving from 1981 to 1989. His term saw a restoration of prosperity at home, with the goal of achieving "peace through strength" abroad." "A History of the Presidents" at the White House website.

March 18, 2017

Will the Arlington County Board Play Scrooge or Santa Claus?

Yesterday, we growled about the Arlington County Manager's release of a list of possible budget cuts, totaling $11.1 million, that the County Board could use to obviate the need to raise the real estate tax rate a complete 2-cents.

After posting the Growls, we saw comments made yesterday by Scott McCaffrey in his Editor's Notebook, a blog at the Arlington Sun Gazette. He recalled how a prior Arlington County Board faced budget crunches, writing:

"This may not be exactly how it went down, but it is how I remember it.

"A decade or more ago, when the Arlington County government was facing a bit of a fiscal crunch, the county-manager-du-jour issued an edict to his department heads: Find me ways to cut 5 percent from your budgets, just in case we need to.

"Some of the departments – libraries springs to mind – took the project seriously, and provided a list of reductions. Other departments were a little more cavalier; if memory serves, the police department essentially said, “Go ahead, elected officials, you can cut the SWAT team if you have to. But don’t blame us if you find yourself in a hostage situation and we cannot help you.”

"That may have been the last year those “goldenrod” reductions (so called because of the color of the paper the proposed cuts were put on) were ever considered.

"Yesterday, County Manager Mark Schwartz unveiled a proposal for $11 million (ish) of potential cuts, in order to alleviate the need for a 2-cent increase in the tax rate. And looking over the list, it’s clear that this is another effort – whether intentional or not – that ensures the positions and programs on the chopping block are not taken seriously by the County Board.

"Prediction: A majority of County Board members will wring their hands, furrow their brows and say, darn it, they just can’t find anything in the list of proposed cuts that isn’t absolutely essential.

"Meanwhile, programs where cuts indeed could be made will survive, and the tax rate will inevitably rise. (I’ve been to this rodeo before, as Joan Crawford might say.)

"Of course, this whole charade would have been unnecessary had County Board members over the summer simply cobbled away some of their surplus, rather than allocating it to a host of non-budgeted items. But it’s always more fun being Santa Claus than Scrooge, especially when someone else is providing the money for the presents."

Last Saturday, we growled about the need for the Arlington County Board to advertise a possible 2-cent real estate tax rate increase, agreeing with the opinion of ARLnow.com columnist Peter Rousselot, who opined the budget gap that requires the tax increase was entirely self-inflicted because the County Board failed to "carry over last fall's close-out surplus."

Moreover, Mr. McCaffrey's prediction that the Arlington County Board would wring their hands . . . but fail to find anything in the  Manager's list that isn't absolutely essential, and find it easier to play Santa Claus than Scrooge.

Consequently, Growls readers who are Arlington County taxpayers are encouraged to tell the Arlington County Board to do the right thing and adopt the Manager's entire list of cuts, and then cut some more. Just click-on the following link to send the Board a message:

  • Call the County Board office at (703) 228-3130.

And tell them ACTA sent you.

March 2017
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Items in Growls are written by individual ACTA members and do not necessarily represent the views of the Arlington County Taxpayers Association, Inc. Please send comments about Growls to The Growl Meister