Wednesday, May 31, 2017

TXLV: The lie of tax cuts and government fiscal restraint.

The Texas Legislature has (finally) reached Sine Die.  This means that it's time for the Texas LockStep Political Media and other groups to start spinning their fantasies about what it all means.

Money Grab. The Increasingly Irrelevant Chron Editorial Board. HoustonChronicle.com ($$$)

In what is really a love letter to local State Senator Sylvia Garcia (who has been a progressive fave/rave in the area for some time now) the bi-annual unsigned editorial bemoaning Texas relatively low tax system takes a new tack this year.  Suggesting that high property tax values are due, in whole, to the lack of other taxes at other levels.

One thing that never changes at the Chron is the desire to have large wads of cash thrown into a catapult and hurled at the problem.  Of course, those taxes are best when paid by other people than them.  In an attempt to seem bipartisan the Chron lists one "solution" as being a tax proposed by a Republican (Ed Emmett's proposed County Sales Tax) and one from a Democrat (Fort Bend County Chairman Ben Brown's proposal for a State income Tax).

In reality neither of these would put much of a dent in property taxes.  The idea that government will enact one tax while lowering, or eliminating another is a false promise placed in front of gullible voters which has historically never come to fruition.  Remember when the Texas "Margins" Tax was supposed to lower property taxes?  How did that work out for you?

The problem, although it won't be admitted to publicly, is that there are too many organizations with too many hands reaching into the taxpayer pie, each with different agendas.  Let us say, for grins, that the County gets a sales tax of .05% and decreases their property tax burden proportionately. OK, but the City of Houston is already pushing to raise their property tax rate due to pension under-funding and the fact that the past three mayors have acted in fiscally imprudent manners, so Houston will raise their share of the takings until resident's eyes bleed.  This will lead to more people moving out of the city and into the county, who will then be forced to re-raise property taxes to keep up with infrastructure demand.

So now, especially if you live in the city, you're saddled with higher property taxes that are still increasing due to appraisal creep AND you have to pay more in sales tax and a state income tax to boot.

Even Steve Radack's idea to "expand Medicare" to cover costs is not the bag of free money that's being promised.  Medicare is nearing insolvency, and to make up the loss the United State's federal government is going to have to get serious about fixing their tax system soon. Also, there's a 10 year limitation in what's left of ACA for "free" access to those funds. Eventually, the bill comes due and the State has to start covering those costs. There is not now, nor has there ever been, any such thing as a free lunch.

Here's the rub.

Things (stuff, trinkets, etc.) have to be paid for, political legacies have to be enshrined and no one wants to have their name attached to the phrase "tore down the Astrodome".  In order to continue to bribe the electorate the government has to figure out a way to increase tax burdens while convincing a majority of the citizenry that they're doing it to "the other guy". People are more likely to accept a small tax increase on themselves if they think those slightly more well off than they (or even better, evil "corporations") are shouldering a much larger share of the version. Politicians, who are rational actors despite being (for the most part) functional idiots, understand this and have done a great job convincing most of academia and the media that this is a swell way to run a country.  How else do you explain a man who owns three homes running around suggesting that he's a 'man of the people' and really only wants healthcare and higher education to be "free" not being laughed out of the building?

Even though the ideas are wrong the country still has to run, things need to be purchased, the general security provided for and debt service paid.  What this means is that serious, meaningful tax reform has to be broached at every level of government. The goof-balls in Washington D.C. could do a lot worse than simplifying the tax code to the point that the IRS is not really needed while the pugilists in Austin (and other state-houses) should start by figuring out what NEEDS to be done, fund that and then do those "nice to have" things based on remaining money.  Counties and Cities just simply need to go on a diet. Public works is a must, of course, as are policing and other emergency services.  But after that?

Yes, I get it that you feel you really NEED that $100K per year from the County to hold your civic club's annual garden party but the facts are that you don't. If the business community feels that parks and green space is vital to their ability to attract talent than allow them to underwrite the cost. If nothing else it will save us from having politicians gloating that their legacy is a sidewalk on which dogs pee and poop. (The Bill and Andrea White promenade at Discovery Green in case you're wondering).

A trap that conservatives (including little l libertarians) fall into is the fallacy of "no".  You cannot run a government simply by shouting that and hoping for the best.  Because things have to be done.  The biggest issue for what's left of the conservative movement is not sanctuary cities, or bathroom obsessions, it's making the case for real, meaningful tax reform for all. And doing a better job explaining to the family of four making $45K per year why it's a boon for them.

The alternative is in the link above, an asinine argument that by failing to increase taxes sufficiently the government has failed to cut them.

To be fair, there is one thing on which the Chron and I agree.  In order to get nice things from our government we're going to have to elect new, serious people to do the governing.  This might come as a shock but I am referring to your elected representative, including the one in your district that you like.  They need to go. (as do mine)

Until that happens we're just whistling past the graveyard.