Budget and Taxes

Republican House members held their pre-session caucus yesterday. Budget numbers look good, which is a nice change from the past few years. My hope and goal is to use the unanticipated revenue to pay down our debts. Though there will be great pressure to push the money to the various agencies, we first should replace bonded indebtedness with cash. Translated, this means using the money for infrastructure projects (roads and buildings), instead of bonding for the projects. This plan will generate the usual arguments from those who want us to spend the money on their programs ("You're paving over our kids!"), but sound fiscal policy (i.e., paying down debt, instead of spending the extra money) benefits us all.

I presented ideas on tax reform. I suggested we rework the individual income tax; theoretically, it is bracketed so that higher wage-earners pay a higher rate. However, the highest rate (7%) kicks in at taxable income of just $4,300 -- meaning that our system is basically a flat-tax (everyone pays 7%) without the simplicity of an intentional flat-tax. Also, I suggested we eliminate the corporate income tax. It creates double taxation and chases businesses and jobs away from the State.