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10.01.2008 0

Passing the Buck

  • On: 10/08/2008 16:12:53
  • In: Taxes
  • “Don’t tax you, don’t tax me, tax that man behind the tree.” – Senator Russell Long (D-LA)

    Whether rich, poor, or middle of the road, one thing all agree upon is that they do not want to see any more of their hard-earned money go down the bottomless pit of higher taxes. They may prefer that their neighbor’s taxes be raised and not theirs. But, nonetheless, the sentiment of the people, regardless of their economic status, is that they want to keep more of their own money.

    And so it is in Mississippi, where a commission appointed by Republican Governor Haley Barbour is receiving seemingly contradictory advice about how to restructure the state’s tax code:

    “Owners of small businesses said at a public meeting Monday that they want to reduce or eliminate the inventory tax. City and county leaders warned the loss of revenue from inventory taxes would force them to cut services or increase property taxes.

    “Advocates for the poor want to reduce the state’s 7 percent sales tax rate, particularly on groceries.

    “A Jackson man who is tired of his property taxes increasing every few years when his home is reappraised said some sales taxes should increase – not on groceries, but on other, nonessential items.”

    So, when you ask the businesses, the poor, or the property owners, everyone is feeling the pinch from the tax burden. Those taxes increase the cost of doing business, of living in a home, and even of going grocery shopping.

    To Governor Barbour’s credit, he has appointed the commission to look into restructuring the code with an eye towards reducing the tax burden across the state, and across the board.

    Clearly, with everybody seeking tax relief at a time of rising prices that would be the only equitable solution. When taxes are cut, they should be cut across the board anyway, because they represent lost opportunities in the economy. And politicians need not consider how to “offset” tax cuts in one area with tax increases in other areas. Instead it should be concerned with keeping taxes at a low, fair level, and keeping spending under control.

    Then, you won’t have the people of Mississippi asking the government to cut their taxes but to raise the taxes of the man behind the tree. And the government won’t be looking behind the tree, in its branches, or under its foliage for ever more revenue to spend on ever more wasteful bureaucratic boondoggles.

    ALG Perspective:
    Taxes are not just an issue for the rich. All are affected by high taxes, and generally speaking, the higher the tax burden, the greater the costs to the economy. Instead of setting up high tax rates to bring in revenue, politicians should consider keeping taxes low, which will eventually increase the tax base by lowering the cost of living in that state. And then, with more permanent residents, the state’s economy will grow, and those revenues that the politicians were looking for will appear. All this without adversely impacting the state of the economy, or the individual’s purchasing power.

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